Tourism Avalanche in Region Popular with Taiwanese Travelers! 'Visitor Numbers Drop 20%, Foreign Spending Plummets 44%' – Scholars Reveal Underlying Causes

Hong Kong's local consumer market is facing severe structural challenges. According to the latest data released by the Legislative Council, after adjusting for inflation, Hong Kong residents' domestic goods consumption expenditure in 2025 reached HK$198.9 billion (approximately NT$815.5 billion), a slight 1% decrease compared to 2018. Meanwhile, residents' overseas spending surged by 10% during the same period, indicating a fundamental shift in consumer spending behavior.

In addition to local residents shifting their spending overseas, inbound tourism spending has also significantly declined, placing immense pressure on Hong Kong’s frontline retail and food service industries.

Why are Hong Kong residents increasingly choosing to spend in mainland China? Economist Lee Siu-po, in a media interview, pointed out that despite Hong Kong's overall economic growth in recent years, local consumption has paradoxically declined. He attributes this primarily to "high rents and high labor costs undermining citizens’ willingness to consume locally."

Lee further assessed that as long as the government's revenue model remains heavily reliant on land sales, the current situation—characterized by massive outflow of domestic consumer funds and a persistently weak retail market—is unlikely to see fundamental improvement in the short term.

How much has tourist spending dropped? And how many fewer visitors are arriving compared to peak levels?

Beyond local consumers spending abroad, inbound tourists’ spending power has also deteriorated significantly. Legislative Council data shows that total visitor spending in Hong Kong plummeted by 44% in 2025. Although the government gradually reopened borders three years ago, leading to a return of mainland Chinese tourists, overall visitor numbers still fall far short of pre-pandemic highs.

Data indicates that in 2025, total inbound visitors to Hong Kong amounted to nearly 50 million, which is 23% lower than the historical peak recorded in 2018. When the COVID-19 pandemic hit Hong Kong in early 2020, border closures lasting three years prevented foreign and mainland tourists from entering, plunging local restaurants and retailers into prolonged operational crises. Many businesses survived only through government subsidies during that period.

Are there signs of recovery for the food and retail sectors? Recent official statistics reveal modest growth.

While large numbers of mainland tourists have returned post-reopening, a simultaneous rise in Hong Kong residents' 'northbound consumption'—traveling to mainland China for dining and leisure—has created significant disruption for local industries. However, recent short-term data from official sources suggest a slight stabilization trend.

According to the latest figures released by the Census and Statistics Department, last month Hong Kong’s total retail sales reached HK$31.5 billion, a 4.6% increase year-on-year. In the food services sector, total restaurant receipts in Q2 of this year amounted to HK$27.2 billion, showing a marginal 0.4% increase. Amid ongoing shifts in consumption patterns, the market appears to be searching for a new equilibrium.