Policy Address 2025: Hong Kong develops tourism economy to revitalise retail industry

The Hong Kong government plans to unveil the “ Tourism Everywhere” strategy, combining local characteristics with international elements, to develop the tourism economy, said Chief Executive John Lee Ka-chiu during his Policy Address Speech on Wednesday.

The tourism economy strategy encompasses a diverse portfolio of targeted initiatives, with yacht economy, horse racing tourism, cruise tourism, and eco-experiences included.

These efforts of the government in tourism strategy aim to attract high-spending visitor segments, boost consumption, and drive growth across the retail, F&B, and hospitality sectors, according to Colliers, a global real estate and investment management consultancy,  in a comment after the speech was delivered.

“As of August this year, the overall visitor arrivals had reached 33.2 million, a significant increase of 12% over the same period last year", said Lee. 

Sophia Lam, a member of the Southern District Council, which is home to tourist attractions like Ocean Park and Repulse Bay, said the aim of promoting tourism by leveraging local culture is to boost the retail economy and stimulate consumer spending.

According to the release from the Census and Statistics Department, the provisional estimate for total retail sales value was HK$214.8 billion for the first seven months of 2025, a decrease of 2.6% compared to the sum of the first 7 months in 2024.

The government shows that from January 2023 to July 2025, the number of visitor arrivals in Hong Kong increased significantly, while the retail sales slightly declined during the same period.

After the epidemic, Hong Kong's tourism industry gradually recovered, with the number of visitors to Hong Kong in the first seven months of 2025 reaching about 28 million.

Chen Sihao, a professor of the Department of Accountancy, Economics and Finance at Hong Kong Baptist University, explained that the depreciation of the RMB has dampened mainland tourists’ enthusiasm for shopping in Hong Kong, contributing to the sluggish retail performance.

Damon Lau Chak-ho, owner of a local restaurant in Hung Hom, noticed that mainland visitors’ spending has diminished substantially in recent years.

“Previously, average per-person spending ranged from HKD 400 to 500, but now it has dropped to HKD 100 to 200,” said Lau.

He also pointed out that more events, such as football matches and concerts, can promote local consumption, with the crowds concentrating near particular venues, leaving other areas like the Greater Northwest relatively unaffected.

Zooming into the diverse sectors within retail-consumption, comparing July 2025 with July 2024, eight retail sectors showed growth, while seven declined, with motor vehicles and parts declining the most, down 12.4%.

The Liberal Party previously proposed to the government an issuance of HK$2,000 electronic consumption vouchers to local residents over 18 years old early this year, but the proposal was not adopted in this year’s Policy Address. 

Peter Shiu, the Chairman of the Liberal Party and Legislative Council member, expressed disappointment but understood the financial difficulties that the government faced. 

He added that changes in consumption patterns and the northward shift of consumption have posed great challenges to the Hong Kong retail industry, especially for some of the small and medium-sized stores.

In July 2025, the value of online retail sales reached HK$2.58 billion, reflecting a 13.2% increase compared to the same period in 2024. In 2024, the total value of online retail sales was HK$31.66 billion, accounting for 8% of total retail sales.

Faced with the challenge posed by the rise of cross-border e-commerce, Shiu stated that merchants must actively develop online sales, leverage the mainland's well-established production chains and resources, create products with an international perspective, and explore broader markets.