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The spillover effect of six months of violent protests and rioting in Hong Kong is looming large as consumption by visitors continues to drop, leading to the collapse of a number of leading local or global retailers and dining giants.
Executives, government officials and media outlets have spoken up about their shaken confidence and concerns as mounting pressure on rent, labor costs and revenue is clouding tourist-oriented and trade-reliant sectors.
Fairwood Holdings Ltd, a leading local diner chain listed on Hong Kong"s stock exchange, has attributed its midterm profit decline this year to factors including "rising rental and labor costs" and "weakened market sentiment".
"Rising hourly rates for staff and increased rentals for some store locations have posed some challenges in the period," the company said on Wednesday in an announcement of interim results covering the six months ended on Sept 30.
Hong Kong"s overall jobless rate for August to October was 3.1 percent, compared with 2.9 percent in the same period last year, according to government figures issued on November 18.
The year-on-year jobless rate in the retail sector for August to October rose to 4.5 percent from 3.8 percent, while the hotel sector"s rate increased to 2.9 percent from 2.3 percent, and that for the dining sector rose to 6.1 percent from 4.3 percent.
A report on Friday in the Financial Times warned that "the protests have left a mark on the day-to-day functioning of Hong Kong", as business events and meetings scheduled in Hong Kong have been canceled, while others are "sparsely attended and companies have quietly begun placing limits on travel to Hong Kong".
In addition, rioting in the city has led to the curtailing of some flights connecting Hong Kong to destinations in the Asia-Pacific region.
Hong Kong Airlines announced on Friday that it will halt its regular flights to Ho Chi Minh City, Vietnam, on Feb 20 as well as flights to Tianjin on Feb 10.
"In view of the continuing social instability in Hong Kong and the challenging business environment, Hong Kong Airlines will continue to focus on operating the primary routes after a comprehensive review of its network strategy," it said in a statement.
The company has reduced its capacity and the number of flights in the coming months, but "weak travel demand continues to affect its business and revenue", it said.
The chaos affected many travelers from the Chinese mainland, a major source of shoppers and dining guests in Hong Kong.
Hong Kong-based drugstore chain Sasa International Holdings said on Nov 21, when announcing interim results, that "the Hong Kong market weakened further from July onward" because of a sharp drop in the number of mainland visitors.
Since mainland tourists "contribute a much larger proportion of revenue in this market, the group"s overall retail sales performance in the second quarter decreased by 35.4 percent in Hong Kong", it said.
The reduced number of visitors has also led to the shutting down of shopping malls, such as San Tin Shopping City near the border with Shenzhen, Guangdong province, local media reported.
"Looking at the social and market situation, the (property) price index will continue to decline in November and December," said Thomas Lam, executive director of property consultancy Knight Frank, in a report by Reuters on Friday
Businesses from around the world in such sectors as agricultural products are also feeling the pain.
Ben Martin, chairman of the Australian Mango Industry Association, told local media that the unrest is "having a significant impact" on how much fruit Hong Kong is consuming as well as "the fruit and vegetable trade through those markets".
"The longer the unrest goes for, the longer it"s going to have an impact on Australian agriculture," Martin said in a report on Friday by Australian Broadcasting Corp.
The report also quoted Australian Trade Minister Simon Birmingham as saying "there are negative impacts" on Australian sectors such as the food service industry, restaurants and catering, and "these are tough times in Hong Kong"s economy".lokai rubber braceletpersonalized awareness braceletspersonalized ballerina braceletdebossed rubber wristbandsbuild your own wristband