Hong Kong Rolls Out Financial Relief Measures as Pax Numbers Decline

 - October 22, 2019, 2:03 PM
Hong Kong expected to announce further tourism and aviation-related relief measures. (Photo: Airbus A330 wikimedia commons, photographer – N509FZ)

Hong Kong’s finance secretary Paul Chan announced on Tuesday $255 million worth of relief measures, varying from fuel subsidies for ground-based transportation and reduced airport tenant rentals to educational allowances and electrical subsidies in a bid to revitalize the economy and support employment following a slump in visitor numbers. According to a government statement, other measures will be examined to revitalize the tourism sector, in distress from over three months of protests.

“In the face of the economic downturn, both enterprises and residents alike are in need of support. Although the launch of the various rounds of supporting measures may cause a fiscal deficit, with sound financial strength the Government will utilize our financial reserves to implement timely and suitable countercyclical measures, so as to stimulate the economy and relieve people's hardship, and go through the wave of economic downturn with the community together," Chan said.

The latest round of financial support follows a $2.4 billion relief package dispersed in August and a $179 million worth of measures in September. Chan said all three support packages are expected to boost the economy by a total of 2 percent.

According to Hong Kong media, residents are expected to benefit from a subsidy of nearly $18 on flight tickets and roughly $14 on hotel accommodations; foreign visitors who go through a local travel agency will be eligible for subsidies, as will those who stay in Hong Kong for a certain number of days. Chan did not reveal specifics but said the Commerce and Economic Development Bureau, along with the Hong Kong Tourism Board and the Travel Industry Council of Hong Kong, is mulling over financial relief measures. In late September, the Board of Airline Representatives of Hong Kong, representing more than 70 carriers flying to and from the city, called on the government to waive landing and parking fees and reduce airport operational costs, including rental fees for companies and lounges.

The government’s relief measures come as Hong Kong’s Airport Authority reported a second consecutive month of plummeting passenger numbers. August saw a decline of 12.4 percent, to six million, while September recorded a 12.8 percent drop in passenger volume. The slump in traffic numbers prompted the International Air Transport Association (IATA) on Sunday to urge the government to consider financial relief to the aviation and tourism sector.

“Airlines have reduced the number of scheduled seats in the market, although the size of the reduction so far suggests that the downturn is expected of a temporary measure. However, any further prolongation of the disturbances may induce airlines to more drastically change the amount of services, either in seats and/or frequencies,” IATA said in its latest Hong Kong research report.

“Maintaining aviation connectivity is critical to Hong Kong. The government should consider financial relief measures to support the 333,000 jobs and 10.2 percent of GDP dependent on the aviation and tourism sector.”