Hong Kong has long been the mecca for the super rich, with tourists from mainland China and around the world flocking to the city to spend up big at its luxury-brand stores.
But the seemingly endless and increasingly violent protests paralysing the city are spreading fear among travellers and they are now staying away.
Take a walk down Canton Road, a famous thoroughfare lined with a dazzling array of luxury boutiques like Gucci, Dior and Prada, and it is easy to see impact the unrest is having.
In most of the stores, there are more staff than customers.
When the ABC went inside, we were eagerly greeted by four or five staff members who were keen to make a sale, only to be disappointed when asked for an interview.
None of the managers wanted to identify themselves, but one agreed to speak anonymously.
He said he cannot portray his political views publicly and must stay “neutral” and even “quiet” on the subject.
“We mainly cater for tourist business. In fact, the majority of sales is from tourists – tourists from China,” he said.
The manager said it was clear wealthy people in mainland China were aware of the turmoil in Hong Kong.
“It’s definitely affecting the number of people coming in. I would say sales have dropped, definitely by double digits – the 30 to 50 per cent range,” he said.
It is a worrying sign for consumer brands and luxury retailers, which have become dependent on Hong Kong as a top destination for millions of shoppers from mainland China each year.
What started as a peaceful demonstration over a controversial extradition bill has morphed into a violent movement against China’s tightening grip over the former British colony.
Protesters have co-ordinated simultaneous rallies across the city and into the suburbs while police have responded with growing force, firing tear gas and rubber bullets at protesters.
More than 500 protesters have been injured and many more arrested, while police have fired close to 2000 rounds of tear gas.
At times, key districts have been blocked by barricades, including the popular shopping district in Causeway Bay, which became engulfed in tear gas last week.
A local resident from Tsim Sha Tsui, who did not want to be identified, told the ABC the violence was frightening people away.
“We can see the tourist numbers in Canton Road have really decreased,” she said.
“They are frightening people away, they see the online coverage about things happening in Hong Kong right now and they think it’s really violent. It has really influenced their perception of Hong Kong.”
Hong Kong economy takes a hit as protests continue
Luxury sales for June in Hong Kong were down more than 17 per cent on the previous year, according to S&P Global.
The Hong Kong Government also released its own figures, which showed sales of jewellery, watches, clocks and valuable gifts at retail outlets in June dropped to $1 billion, down from $1.32 billion last year.
Total retail sales for last month are estimated at $6.6 billion, almost 7 per cent below June last year.
The Kering company, which owns Gucci, Saint Laurent, Alexander McQueen and Balenciaga, said it expected underperformance in Hong Kong due to the protests.
Prada said Hong Kong had also been a drag on sales in Asia while Hugo Boss has closed its airport store, and one in Hong Kong’s luxury strip.
Ralph Lauren has closed three stores in the city.
Hong Kong’s finance chief, Paul Chan Mo-po, this week warned the city’s economy could plunge into recession if it continued to be rocked by escalating turmoil in the streets and the global trade war.
He issued the grave warning as the financial hub was paralysed by flight cancellations, commuter chaos, traffic jams and service disruptions when thousands of people joined the largest citywide strike in decades on Monday.
Analysts estimated the economic cost of the day of protests could be up to $487 million.
Cathay Pacific, the territory’s national carrier, said it had suffered a double-digit fall in ticket sales for travel to the city, due to the social unrest.
Protestors gathering in the arrival hall of Hong Kong international airport. They’re planning a peaceful sit in, distributing information to foreign tourists as they arrive in a bid to gain support for their democracy fight @abcnews #hkprotest pic.twitter.com/CncnfR08bA
— Kathryn Diss (@KathrynDiss) August 9, 2019
“Hong Kong’s economy is facing a very difficult situation,” Mr Chan said.
“It is facing very big downward pressure as it has to deal with the ongoing US-China trade war and internal challenges at the same time.”
China’s state council on Hong Kong has also spoken out, blaming protesters for destroying the city’s economy.
“For the past two months, the attacks have caused a serious impact on the economic development and people’s wellbeing in Hong Kong,” said Yang Guang, a spokesperson for China’s Hong Kong and Macau Affairs office.
Eighteen countries and regions have issued travel advisories for people considering going to Hong Kong.
“Worse still, the situation in Hong Kong has seriously dented the confidence of international investors, who have openly talked about their grave concerns about the business climate,” he said.
The growing protests are also weighing on the neighbouring Chinese territory of Macau as visitors steer clear of the world’s biggest gambling hub, worried over transport disruptions and safety concerns.
Macau, which is an hour away by ferry from Hong Kong or a 30-minute drive from its international airport, reported a 3.5 per cent fall in gaming revenues in July.