21st April 2024 – (Hong Kong) As the festive spirit of the May Day holiday approaches, Hong Kong looks forward to welcoming approximately 800,000 Mainland tourists, a symbol of potential revival for the city’s subdued travel market. Yet, despite these encouraging figures, there is an underlying issue: the steady decline of Hong Kong’s travel agencies. Even with the anticipated surge of visitors, the local travel industry confronts challenges that threaten to diminish the city’s status as a top travel destination.

In recent months, Hong Kong has witnessed the closure of numerous travel agencies, a development that signals deeper systemic issues within the sector. Notably, several small and medium-sized agencies have ceased operations, with some choosing to shut their doors right before the expected tourist surge. This wave of closures includes well-known names such as Hoi Kong Travel Limited, which recently ended its operations.

This trend is concerning, not only because of the loss of business but also due to the impact on employment and the availability of curated travel experiences that these agencies once provided. The Travel Industry Authority has noted a significant decrease in the number of business permits and licensed practitioners, including tour guides, which has plummeted to a record low this year.

The reasons behind these closures are multifaceted. Industry experts suggest that these are not merely responses to a lack of market opportunities but rather reflect deeper issues such as high operational costs, stringent regulatory environments, and fierce competition both locally and from online platforms. The decline in licensed personnel may also suggest a shift in the industry’s structure, potentially leading to a focus on fewer but more specialised and higher-quality service providers.

This decrease in traditional travel agencies comes at a time when Hong Kong is trying to recover and reinvent its tourism sector post-pandemic. Before COVID-19, Hong Kong welcomed around 60 million visitors annually. Last year, the numbers recovered to only half of the pre-pandemic figures. The current projections estimate that visitor numbers might reach between 43 to 46 million this year, but these are still below the city’s past tourism glory.

The evolving patterns of tourism also indicate a shift in visitor behaviour, with a growing preference for more personalised and culturally immersive experiences rather than the traditional shopping and dining outings. This change necessitates a transformation in how travel services are offered, with a greater emphasis on quality and customisation—a challenge that is now harder to meet with fewer active travel agencies.

To navigate the turbulent times facing Hong Kong’s travel industry, several strategic adjustments are necessary. Travel agencies should diversify their services to include more personalised tours and experiences that align with the evolving preferences of travellers. Additionally, enhancing digital capabilities is crucial as the rise of online travel services necessitates competitive offerings such as seamless online booking and virtual tours. Establishing partnerships and collaborations with providers in the hospitality and entertainment sectors can create bundled packages that attract tourists seeking comprehensive experiences. Furthermore, the local government can support the industry by providing training, subsidies, and more flexible regulatory frameworks to help travel agencies adapt and thrive.

The success of this endeavour will depend on collaborative efforts between the government, the private sector, and the community to foster an environment that not only attracts tourists but also enriches their travel experience.