Can Hong Kong regain its lustre as 'Asia's World City'?

After weeks of government officials hinting about loosening the grip on city’s stringent travel rules, Hong Kong took the highly anticipated move to cut mandatory hotel quarantine for inbound travellers from one week to three days (followed by four-day medical surveillance at home).

It’s a huge step-up for the thousands of pandemic-weary residents returning home after a long summer travel. Three days in a locked hotel room is easier and cheaper to endure than seven, which in turn is better than 14, the required stay till April this year. During the four-day medical surveillance period, residents will be allowed restricted movement within the city under a new China-like health code system. It must be noted that those without a residential address in the city will have to find an alternate accommodation for the remaining four days, perhaps another hotel which offers "self-monitoring period" rooms. 

For a city that seeks to restore its position as a financial hub and revive the economy, business chambers like the American Chamber of Commerce see it as a “step in the right direction”.

There’s more glimmer of hope for the SAR's battered reputation.

After a three-year hiatus, November will see the return of the iconic three-day Rugby Sevens, the city’s biggest and booziest sporting event. Sevens is synonymous with business. Till 2018, the raucous event attracted more than two dozen international teams, brand sponsorships, global bigwigs who help to fill the 34,000-seating capacity stadium and tills of bars and restaurants. Banks would often hold client meetings to coincide with the landmark event.

This year too, Hong Kong’s central bank is doing the same–hosting a two-day international fintech conference in November–where CEOs of Goldman Sachs, Morgan Stanley, and UBS among others are invited. It is hoped is that arrival of Wall Street executives will trumpet the financial hub’s recovery to the world.

Since 2020, the city’s economy has slipped into recession. GDP has decreased for the second consecutive quarter in 2022, the economy shrank by contracting 3.9% in the first quarter and 1.4% in the second. Financial firm Natixis SA predicts the city’s economic growth will shrink once again for the third time in four years.

Though the number of quarantine days see a reduction, tourists and business travellers are still put off by the rigamarole of doing a negative nucleic acid test before flying and the threat of a spartan isolation if detected positive on arrival. No wonder, as the rest of the world and especially rival Singapore struggle with chaotic, overburdened airports, the Hong Kong International Airport (HKIA) feels like a dystopian parallel world where there are more paramedics than passengers. Footfall in HKIA is still less than 1% of its peak in 2019.

Hong Kong built its global reputation on its openness, ease of doing business and connectivity; will the recent change in Covid restrictions, the Rugby Sevens and the big bankers’ conference tied to it be the catalyst for brands to once again invest in ‘Asia’s World City’? Or that crown has been taken over by Singapore’s overwhelming business calendar for good?

Charles Lankester
EVP, global reputation & risk, Ruder Finn

Hong Kong has plunged from its claim of being 'Asia’s World City' to becoming 'Asia’s Pariah City'. The Hong Kong government has resolutely stood by its baffling isolationist quarantine rule as part of its 'dynamic zero Covid' policy which has made the rest of the world write off the city in terms of business travel, tourism, and liveability.

The government must embrace this opportunity of hosting the Sevens and the global financial conference to relaunch Hong Kong to the world. Bring global financial leaders here for four days. Let new CEO John Lee showcase his vision for Hong Kong and the banker’s conference to the most important group of stakeholders on the planet. Global finance meets Hong Kong Vision 2030. Guests can then have a weekend of great sporting competition and entertainment. Such a plan would bring huge advantages and put Hong Kong firmly back on the global agenda.

But here is the ‘but’. The government must get real (and realistic!) about opening Hong Kong’s doors. Quarantine needs to be eliminated or nobody will show up to the party. The world loves Hong Kong but the city has become a laughing stock. Singapore, London, New York and virtually everywhere else = open. Hong Kong = closed. Let's get back where we need to be in terms of respect, admiration, and affection. Send a single message to our guests: Hong Kong’s back. 

Kiri Sinclair
Founder and CEO, Sinclair

This year will mark my 40^th HK Rugby Sevens. I’m beyond excited. Kicking off a Hong Kong comeback with the Sevens is an excellent strategy. Hong Kong is acclaimed for its MICE industry. From sports events such as the Sevens to playing host to a wide array of commercial, industry and cultural conferences, festivals and shows.

Not only does the MICE market have huge financial benefit to the city, as a trade, commercial and cultural hub in Asia, Hong Kong thrives on bringing people together. The collaboration, friendships, and business partnerships that face-to-face events of all sizes can spark would also give a sense of optimism (and joy) to many in the city. However, the challenge is the continuing barriers to entry. I am sure some avid rugby fans and business leaders will fly in, however unless quarantine requirements are removed most will stay away.

The investment in time that quarantine requires is a deterrent. For those who can overlook that, the barrier of cost, availably and booking process will stop them in their tracks. The recently announced 3+4 quarantine arrangement is a good first step, however, opening Hong Kong’s international borders to quarantine free travel is the only true catalyst that will encourage brands to fully invest in our events calendar again. It’s time to open Hong Kong. 

Girish Jhunjhunwala
CEO, Ovolo Hotels

The 2017 Sevens brought in over HK$380m to local businesses including restaurants and bars, retailers and of course hotels, and this was growing each year right up until the pandemic changed the world. However, around half of those attending used to come from overseas which also help grow tourism and the corporate sector—we need this back. This year, unless quarantine is completely scrapped, we will likely see only a trickle of international visitors, which will further damage Hong Kong’s reputation as a global financial and events hub, even with the HKIB Conference taking place at the same time. People come to the Rugby Sevens not only for the sport but for the atmosphere and celebrations outside of the game.  Hong Kong used to be the #1 Sevens venue in the world.

Remember the super upbeat ads during the Sevens games which went global; the Cathay Pacific ads; the Hong Kong Invest ads, we need to bring them back showing we are now open for business.

If Singapore can host the F1 Grand Prix under almost no restrictions, this is what Hong Kong needs to aim for—we need to be able to do the same. The Rugby Sevens is an incredible opportunity to signal to the world that Hong Kong is once again open and is an important step in returning business momentum and regain the mantelpiece of being Asia’s world city. However, if restrictions are not further eased off the back of the August 8 announcement, this incredible milestone of an event would just not be the same.

Dominique Backhouse
Managing director, Companion Communications

As a professional in the lifestyle and hospitality space, if I've learnt one thing over the last 2.5 years, it's that nothing is dependable right now. Things that I thought would always be set in stone have disappeared, others have adapted to such a degree they're unrecognisable.

The only thing that has been truly dependable is the grit and ingenuity of Hong Kong people, getting up to fight another day and finding new ways to hustle. It's been amazing to see how much the local community has flocked to each other and how brands have responded to this interest in all things local. There's been an extraordinary shift towards Hongkong-made for a Hong Kong audience, and it has pushed our F&B, hospitality and cultural scene towards new heights of inventiveness and servicing.

Will the Sevens and the bankers conference create much interest for international brands entering our market? Of course, they want to - there's so much pent-up demand here, and money too. But it's a risky play, and we don't forecast any serious interests for international brands entering HK until the quarantine drops completely. Saying this, it's not all doom and gloom from our perspective - without the international business, Hong Kong is in the midst of a little cultural boom of its own, and it's been a pleasure to be a part of that narrative."

Gary Ng
Senior economist, Asia Pacific, Natixis

Frankly, holding a few big events will not help much. It goes without saying the Rugby Sevens and the banker's conference are good initiatives. However, there is no way Hong Kong can save its global image with the current magnitude of border control and domestic restrictions.

There are two major challenges. First, it is not only about the changes in Hong Kong but the relative policies versus other economies. The relaxed "3+4" quarantine arrangement is still not comparable to zero requirements in major competitors, such as Singapore.

Second, the domestic restrictions are still tight with on-and-off compulsory testing, a China-style health code system and the mandatory mask requirement. Any strong rebound in visitors is unlikely given the declining living quality and heavy costs and uncertainties involved. The restrictions are significant blows to the living quality and economic recovery in Hong Kong. Without a change in the "much ado about nothing" mentality, it is impossible to see how the government can revive its "Invest in Hong Kong" brand. The longer the reopening is delayed, the bigger the chance that cyclical trends will become permanent. Hong Kong will still grow, but its attractiveness may not be the same.

Karrie Bitanga
Director, Imagindustries Limited 

Most brands (and corporates) are keen on Hong Kong opening up and going back to its glory days when it was the happening city in Asia. I believe the current events in Hong Kong including the Rugby Sevens and the upcoming finance conference gives the locals and HK residents a bit of hope that the economy will go back to normal pre-protests and pre-Covid era. The fact that we are a first-world tax-free city in a strategic location is always a huge plus. I believe that brands would always want to do invest here. I look forward to the market being active again post-Covid and I am slowly feeling it's business as usual, and we are gearing up for busy days ahead.