Hong Kong seeks to reverse slide in mainland visitors

A rule limiting visitors from Shenzhen to one trip a week has added momentum to a dive in Hong Kong's visitor numbers - with merchants calling for a review of the measure as the government readies a marketing makeover.

Tour-related incidents and politically motivated protests - culminating in a riot during Chinese New Year - have sent visitor numbers from Hong Kong's key source of tourists plummeting for months.

Inbound mainland visitor figures have decreased by 3 percent year-on-year in 2015, according to the Hong Kong Tourism Board.

A measure launched a year ago to limit visits by Shenzhen residents to once a week is taking its toll on the retail sector. Industry representatives, meanwhile, are not convinced the measure has made any dent in the trade volume of untaxed goods carried across the border for sale by so-called parallel traders.

Chairman of the Hong Kong General Chamber of Pharmacy Lau Oi-kwok wants the policy relaxed, pleading that his members' businesses are becoming untenable because of the decline in visitors.

Lau said pharmacies and shops catering to mainland visitors observed a near 50 percent decline in mainland patrons since the end of the Chinese New Year holidays in February. Many such stores located in Mong Kok, Tsim Sha Tsui and Causeway Bay have closed, he said.

China Travel Service Vice-Chairman and Hong Kong lawmaker Yiu Si-wing said the cap had failed to achieve its purpose, noting that the majority of parallel traders had switched from being mainlanders to Hong Kong residents.

Lau shared the sentiment, adding that the cap was an unfriendly message to one of Hong Kong's most supportive places.

The fallout has extended to shops further up the value chain, with handbag and watch dealers also feeling the crunch, according to Shum Chu-wah, chairman of the Hong Kong Federation of Retail and Wholesale.

Outlets closest to the border were the most visible victims of the downturn, with the damage spreading to hospitality, transport and logistics, Shum said, while survivors resort to large-scale promotions to keep sales afloat.

The SAR government announced in the 2016-17 budget that it will spend HK$240 million ($31 million) to reinvigorate interest among visitors, aiming for healthy, long-term development.