The good news on retail just keeps coming. According to Government figures, the value of total retail sales in April was an estimated $39.5 billion, an increase of 12.3% over the same month last year. Taking a longer view presents an equally rosy picture – in the first four months of 2018, retail sales were up by 13.9% compared with last year.
The Government has put this down to a mix of strong local consumer spending as well as the recovery in inbound tourism. Hong Kong's robust economy right now means local people are more confident about spending their earnings, while efforts to attract more tourists after a dip in visitor numbers in 2016 has paid off.
The Government expects that this situation will continue for the near future, and at the Chamber we generally share this optimism about the current economic climate.
But for businesses in the hotel and retail sectors, celebrations remain somewhat muted. Why? It comes down to some of the same problems that are dogging Hong Kong in general – manpower shortages and excess bureaucracy – as well as the ongoing evolution in consumer behavior driven by e-commerce and new online platforms.
The manpower squeeze means it is difficult for hotels and retail shops to find staff. Good service is crucial to keep customers and tourists coming back, and for word-of-mouth advertising – especially at a time when it is very easy for disgruntled customers to share their experiences on social media. However, it is impossible for a short-staffed shop or restaurant to give top-quality service when its employees are rushed off their feet.
And successful retailers will be more reluctant to expand their businesses if they are concerned about the struggle to hire adequate staff.
The growth in red tape is another issue, and the generally high cost of doing business in Hong Kong is partly down to the cost of complying with the increasing regulations.
Tourism and retail are both hugely important industries in Hong Kong – not just in providing jobs and income, but also in showcasing our wonderful city and its many attractions to the rest of the world. It is great to see the buoyant sales figures and visitor numbers, but we know that we could do even better. More new and innovative tourist attractions would be very welcome. We could certainly do more to improve Hong Kong as a MICE destination, although we appreciate that the Government is already working on this with its plans to develop the HKCEC.
Members can rest assured that here at the Chamber we will continue to push for an end to unnecessary red tape and to find solutions to the manpower issue. We need to ensure that these two crucial sectors for our economy are fulfilling their entire potential.