Retailers to gain from cancellation of Golden Week
UnionPay sees rise in card spending
The cancellation of the mainland's Golden Week holiday in May could be a boon for the city's retailers, with predictions it will encourage more frequent but shorter visits to Hong Kong by cashed-up tourists.
China UnionPay, the country's sole domestic interbank card operator, said the move to replace the week-long holiday with shorter breaks might boost bank card spending to record highs this year.
Travellers from the mainland spent HK$21.27 billion in Hong Kong using UnionPay cards last year, representing a 71 per cent increase from 2006. In Macau, mainland travellers splurged HK$20.43 billion, with transactions via point of sale machines accounting for about 70 per cent.
'With the rapid development of the mainland economy and the appreciation of the yuan, this year will continue to see robust spending growth in Hong Kong,' said Larry Wang Lixin, deputy general manager of China UnionPay Hong Kong.
His comments ease fears mainlanders may cut spending in the city after the May Golden Week was abolished by the State Council effective this year to ease congestion on the nation's transport networks.
It will be replaced with three-day breaks wedged between the week-long Lunar New Year and National Day holidays. 'The Golden Week holiday was split into shorter holidays so this in turn should benefit nearby tourist spots such as Hong Kong and Macau,' Mr Wang said.
UnionPay said card spending in Hong Kong could maintain double-digit growth this year, but would start to enter a slowdown period after increases of more than 70 per cent in the past three years. Mainland residents used to carry large sums of cash to go shopping as late as the 1990s due to a lack of bank card services.
As the UnionPay network expanded from the mainland to Hong Kong and Macau, cards allowing point of sale dealings and automated teller machine transactions have become a common spending tool for luxury items.
'Our bank card holders normally spend 30 per cent on watches, jewellery and leather bags,' Mr Wang said.
Under current regulations, mainland residents are allowed to bring as much as HK$20,000 into Hong Kong on each visit. 'The amount of cash is not sufficient to meet their spending needs,' he said.
However, a weaker mainland economy might mean average spending by travellers would continue to decrease, said Professor Raymond So Wai-man, associate dean of business administration at the Chinese University of Hong Kong.
'Their spending has come down to HK$4,000 from HK$5,000 when the individual travellers' scheme was introduced.'
The scheme was announced in July 2003 allowing individual travellers to visit the city rather than join tour groups.
