Can Airline Handouts and Free Flights Revive Hong Kong Travel?

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After nearly three years of self-isolation, Hong Kong is dying for some company.

The city announced Thursday it will give away 500,000 free airline tickets, worth north of $250 million, to jump-start its beleaguered tourism industry. But all the free mini-pretzels, Bloody Marys, and in-flight dim sum in the world might not be enough to lure back travelers.

Come Fly With Me. Please?

Hong Kong, a special administrative region of China, has mirrored the mainland in imposing strict, lengthy lockdowns this year while the rest of the world largely carried on as normal. Late last month the city finally lifted its quarantine rules on travelers, who were previously forced to cloister for three days upon arrival. But visitors still must abide by Hong Kong’s relatively strict covid policies, including wearing masks in most public spaces, both indoors and out. Non-compliance risks fines of up to HK $5,000 ($636 USD) — not exactly vacation vibes.

While most international airports weathered a chaotic 2022, Hong Kong’s has stayed a ghost town, with capacity this week at just 19% of 2019 levels, Reuters reported. The city welcomed 184,000 visitors from January to August this year compared to 56 million all of 2019, per the BBC. The low down on the lockdowns isn’t pretty:

  • Cathay Pacific, Hong Kong’s biggest airline, hollowed out its operations during the pandemic, reducing total headcount from 34,200 to 20,800 and imposing pay cuts of up to 58%. Now, as Hong Kong opens up, prospective travelers have seen the price of some airline tickets more than triple amidst what Cathay called an “unprecedented staffing and training shortage.”
  • American Airlines departed the city in late 2021, and Virgin Atlantic announced Wednesday it’s abandoning the city, nixing its London-Hong Kong flight route and shutting down its offices there after 30 years. Virgin said this was partly due to “complexities” caused by Russian airspace being closed off. So it’s dosvedanya from Branson.

Home discomforts: The tourism industry isn’t the only part of Hong Kong’s economy that’s taking a major hit. Goldman Sachs predicted a 30% fall in Hong Kong house prices by the end of 2023. Hong Kong has been the world’s most unaffordable housing market for 12 years now, so no one’s expecting a soft landing.