Asia’s world city might reopen to the world, finally
Summary
Removing hotel-quarantine requirements is only the start of a long climb back for Hong KongHong Kong, which bills itself as Asia’s world city, has been closed to much of the world for more than two years. It might finally open up. That will address some of the grievances of the business community, but don’t expect a massive tourism boom yet.
Hong Kong might soon scrap its compulsory hotel quarantine, according to local media. The city’s chief executive, John Lee, on Tuesday said the government is actively studying whether there is room for adjustments to quarantine arrangements. Visitors to the city currently need to quarantine in a hotel upon arrival for three days at their own expense, followed by four days of self-monitoring. That could be replaced by seven days of self-monitoring, according to the reports.
Hong Kong has been stuck in a pernicious limbo for years now: The supposed bridge between China and the rest of the world is open to neither. In the first seven months of 2022, visitor arrivals to Hong Kong were down 99.7% from the same period in 2019. The city spent much of the past year or so trying to start quarantine-free travel with mainland China, but the highly infectious Omicron variant dashed that hope.
With much of the world outside of China already fully reopened, the city’s status as an international business hub is under threat from regional competitors like Singapore. Scrapping hotel quarantines could help placate some foreign businesses, more of which might leave the city if stringent travel restrictions continue indefinitely.
While the relaxation might help persuade international companies to stay and boost business travel, the return of tourists will take longer. For one, around 80% of visitor arrivals to Hong Kong were from mainland China before the pandemic. China’s own restrictions will take longer to lift.
And while entering the city might become easier, many other Covid-19 restrictions will likely stick around. There are restrictions on where one can go during the self-monitoring period. That might be tolerable for business travelers, but it isn’t ideal for tourists. Shares of Hong Kong’s flagship carrier, Cathay Pacific, have gained 10% this month, but companies more exposed to tourist spending like cosmetics retailer Sa Sa International haven’t gotten a similar boost. Some travelers might also be discouraged by recent political changes including the city’s draconian national security law criminalizing many forms of dissent.
The policy easing could however make it easier for Hong Kong residents—who have been largely stuck in the city for more than two years—to venture out. Hong Kong, for example, accounted for 7% of visitors to Japan in 2019. Japan has yet to fully open but will soon scrap most of its travel restrictions, according to local media. Southeast Asian countries like Thailand and Indonesia that have mostly dropped their restrictions will also benefit. Shares of Hong Kong travel agency EGL Holdings have surged 25% this week.
It would be manifestly self-destructive for a business hub like Hong Kong to stay closed to the outside world forever. But ending mandatory hotel quarantine is only the first step in what will be a long, uncertain campaign to try to recapture the city’s international status.
