Can Singapore Replace Hong Kong As Asia’s Top Luxury Destination?
Following Beijing’s newly proposed national security law, the Guardian dramatically announced that this would be “the end of Hong Kong.” It might seem like an overreaction, but reality shows that Hong Kong has been sinking into chaos since March of 2019. Anti-government protests and COVID-19 have kept wealthy mainland Chinese tourists and investors away from the Special Administrative Region for over a year, and these months of turmoil have naturally come with a high economic cost.
The Hong Kong Tourism Board announced the city’s visitor arrivals fell by a whopping 98.6 percent year-on-year during March, while CNN said Hong Kong’s economy shrank 1.2 percent, and its GDP shrank 2.9 percent in the fourth quarter of 2019.
Retail has been hit particularly hard, with sales falling by 42 percent in March compared to a year ago. Furthermore, the South China Morning Post highlights how consumer spending registered a record drop, falling to $2.9 billion (22.7 billion HKD). And according to The Hong Kong Retail Management Association (HKRMA), about 25 percent of retail stores are expected to close by the end of 2020.
Bearing this dramatic situation in mind, investors have started thinking about other financial and business hubs in the region that could potentially replace Hong Kong, and Singapore, which is a top regional luxury destination, is a strong contender.
With an economic freedom score of 89.4, Singapore has been the world’s freest economy thus far in 2020. Hong Kong came in second with a freedom score of 89.1.
Several investors are more optimistic about Singapore’s rebound than Hong Kong’s, and some data encourages that opinion. For example, a survey conducted by Comptify Analytics shows that during the Covid-19 crisis, twice as many Hong Kong employers laid off staffers than their Singaporean peers.