Lack of innovation cited as reason for declining interest

Despite cutting room rates, Hong Kong hotels are only managing to entice short-term visitors from the Chinese mainland, hoteliers said.

Now there's growing concern over this situation, and not just among hotel owners.

Retailers, restaurant operators and travel agents who have been riding high on the wave of mainland visitors at Christmas and other holidays are worried, too.

Their fear that Hong Kong would one day lose its luster to increasingly affluent, sophisticated mainland tourists seems to have come true.

According to the Hong Kong Tourism Commission, the number of mainland visitors reached 34.9 million in 2012, up 12.1 percent year-on-year. These visitors accounted for 71.8 percent of tourist arrivals in Hong Kong last year.

But those who come are staying for shorter periods and spending less. And big spenders from Shanghai and other major cities are finding Hong Kong, though competitive in convenience and pricing, a little short on chic.

Michael Li Hong-shing, executive director of the Federation of Hong Kong Hotel Owners, said he expected the occupancy rate during the busy Christmas shopping season to reach last year's level, which was about 80 percent.

Mainland visitors, who are expected to account for the majority of the guests, are staying less than two nights on average, he said.

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Li and others in the tourism industry said this state of affairs reflected a lack of innovation in promoting Hong Kong.

"We've been harping on the theme of being a ‘shopping paradise' for years," Li said. It worked for quite some time, he said, but it's getting "tiresome" for everyone.

Hong Kong is losing its attractiveness as a "shopping paradise" to New York, Paris and Milan. "It's fashionable for the big mainland spenders to be seen hauling their ‘loot' out of the home stores of the international fashion houses," Li said.

Boston Consulting Group, in a survey of nearly 1,000 middle-class mainlanders, said that Hong Kong fell off the list of the 15 most popular travel destinations.

He Jiajing, 33, a housewife in Shanghai, used to shop in Hong Kong every month. But she doesn't plan to go there at Christmas this year.

"Prices offered on the Chinese mainland are not much higher than those in Hong Kong. Even though I have an apartment in Shenzhen, which means I can go to Hong Kong easily, I don't bother nowadays. As I've already obtained a Canadian green card, I would rather go to Canada or Europe for Christmas shopping," she said.

As Chinese tourists become more sophisticated, shopping is no longer their prime reason to travel. More of them want to enjoy leisure activities and experience exotic cultures during their trips, according to Vincent Lui, a partner at BCG.

About four in 10 people picked Hong Kong as their top outbound travel destination over the past three years. Thailand, Macao and South Korea also ranked highly, the survey said.

But the city dropped to No 10 on the list when respondents were asked about the next destination they wanted to visit. Eight of the 10 most desired destinations were outside Asia.

Li Aijia, a wine taster in Shanghai, used to fly to Hong Kong every year during the sales season at the end of the year. But this time around, she's "bored" by the prospect.

"Japan seems to me a much better choice now, because there are a lot more things to buy. For the purpose of pure travel, I would definitely opt for Southeast Asian countries, which are so much more fun than Hong Kong," Li said.

What's more, many mainland shoppers are beginning to feel the need for restraint in light of the nation's economic slowdown. The prolonged stock market slump isn't helping, either.

Jiang Xue, a sales manager at a textile machinery manufacturing company in Wuxi, Jiangsu province, decided not to go to Hong Kong this year. Using an overseas shopping agent is more convenient — and cheaper. "Adding in the air tickets, going to Hong Kong for Christmas shopping is totally uneconomical," she said.