“Inflation remained relatively moderate,” he said. “Visitor arrivals exceeded 11 million, providing certain support to the local retail, food and beverage, and transport industries.”

The latest figures showed visitor numbers in the first three months of 2024 were more than double the number logged for the same period last year.

The Tourism Board said the city welcomed 4.4 million inbound travellers between January and March 2023, 76 per cent of them from mainland China. But as overall tourism numbers go up, businesses are struggling with an exodus of residents during the Easter holiday.

Immigration figures showed 350,000 residents had left Hong Kong and about 87,000 visitors had arrived on Sunday by 9pm. More than 450,000 Hongkongers left on Saturday, about 78 per cent of the total number who exited the city, and about 135,000 visitors entered. More than 795,500 people, mostly residents, left the city the day before.

Restaurant operators said they were grappling with a decline in business over the Easter holiday compared with the previous year as people flocked across the border to spend their money and highlighted the high cost of rent, which added to their woes.

“We manage to survive with a high rent while hoping more locals and tourists will come,” Ben Yeung Chi-keung, owner of a hotpot establishment in Tsim Sha Tsui with eight employees, said.

“But after only serving just a few tables on the first two days of the Easter holiday, I don’t see the light ahead.”

Finance chief Chan said the companies in the sector were not recovering at an equal rate and added the economy still needed a boost.

“Businesses located in different areas or targeting different customer segments have experienced significant variations in the extent of their recovery,” Chan said.

“Local economic growth still requires further strengthening, as rapid shifts in consumer behaviour and market dynamics pose numerous challenges for many local small and medium-sized enterprises.”

Hong Kong malls offer free parking as 541,000 people leave city for Easter break

The Monetary Authority on Thursday last week revealed nine measures to support the finance needs of SMEs and to help them sustain operations and development in a strained business environment.

Among the measures was an appeal to banks to “never demand” early repayments from mortgage customers who made timely payments, even when their collateral valuation declined.

The authority added that banks should also avoid adjustment of loan limits based only on collateral value changes.

A minimum transition period of six months will also be provided for credit-limit adjustments under certain conditions to SMEs that faced problems.

“These actions aim to prevent unnecessary pressure on SMEs’ funding during short-term asset market fluctuations and mitigate the risk of triggering chain reactions,” Chan said.

The finance chief also stressed the importance of attracting more footfall and boosting consumer spending power to create more business opportunities and increase sales.

“Both the financial events and art festivals serve to attract increased business activities and tourist spending,” Chan said. “Estimates show that about HK$3 billion [US$383.3 million] in revenue will be generated for Hong Kong with every 1.5 million visitors.

“They also create a positive environment and atmosphere for various industries.”

He added the city’s “Financial Mega Event Week” was a focal point last week, with three major summits held, as well as business lunches and seminars, to bring together more than 1,000 global political and business leaders, high-net-worth individuals, asset owners and representatives from multinational financial institutions.

“These visitors have extensive business and interpersonal networks, with the events generating more high-value visitors for the city,” Chan said.

‘Miserable’: Hong Kong restaurants lament drop in business over Easter holiday

He added that events over “Art March”, including Art@Victoria Harbour, the International Cultural Summit, ComplexCon, Art Basel and Art Central, had also attracted thousands of Hongkongers and visitors.

Gary Ng Cheuk-yan, a senior economist with Natixis Corporate and Investment Bank, said the rebound in visitor numbers meant Hong Kong was reviving its role in connecting businesses and people. But he added benefits and costs might vary across different sectors.

“The change is clearly no saviour to the quiet retail sector and catering services as the toll is way bigger from outbound tourism and the lack of competitiveness,” Ng said.

“More SMEs may still find opportunities from better business and trade flows, but it does not necessarily mean that it is easier to make money in general.

“The situation is still very challenging with higher labour costs and rents as SMEs do not have the ability to bargain, compared with large firms.”

Lawmaker Doreen Kong Yuk-foon argued Hong Kong faced not only a sluggish tourism recovery, but also a structural economic problem.

“To address structural issues, superficial and decorative measures often prove ineffective,” she said.

“Over the past year, efforts such as ‘Hello Hong Kong’, ‘Happy Hong Kong’ and the ‘Night Vibes’ campaign as well as promoting mega events have been implemented, but the problems persist and even deepen.

“It is necessary to accept the new normal and actively seek appropriate responses,” Kong added. “The focus should be on finding the right answers to tackle these challenges, such as housing, the rapid ageing population, declining birth rates and the departure of some young professionals and middle-class individuals from Hong Kong.”