Despite the blazing summer heat, they queued at the milk tea cafe in Central instead of heading into one of the many air-conditioned, fancy eateries nearby.

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“There are Michelin restaurants in Shanghai too, aren’t they all the same?” she said. “But I came for the history and local flair, so it was worth it.”

The pair’s visit was completed with photos at the eatery’s retro storefront.

They were among millions of visitors who returned since Hong Kong lifted all Covid-19 pandemic restrictions earlier this year, but the city’s tourism sector is not cheering yet.

Six months into recovery, industry leaders are searching for ways to position Hong Kong better against punishing competition from other destinations for post-pandemic visitors with new appetites and preferences.

‘We’re not chasing numbers’

According to the Hong Kong Tourism Board, the city welcomed 16.5 million visitors in the first seven months of 2023, up sharply from 124,052 in the same period last year when travel restrictions were in place.

Still, arrivals in the first half were less than two-fifths the number in 2019, with visitors from the mainland accounting for nearly four in five of them.

The board has forecast 25.8 million visitors for the full year, less than half the 2019 number.

“Our recovery is on the right track,” said its executive director, Dane Cheng Ting-yat.

He said the city should no longer chase after high numbers of visitors, but focus instead on the quality of their experiences in the city.

“But I’ll be very honest, we do not see the trajectory being a steep influx,” he said.

Cheng added that the incoming numbers did not mirror the way Hongkongers were leaving in droves for “revenge travel” to make up for three years of being confined by the pandemic.

There have been suggestions that some visitors were staying away because Hong Kong’s image suffered a hit from the social unrest of 2019 followed by Beijing’s imposition of the national security law and electoral reforms to ensure that only “patriots” would be allowed to run the city.

Cheng referred to media reports and said some may have developed “a perception of the city that may be different from reality”.

“But if you talk to people who have actually just been to Hong Kong, they say, ‘It’s really different from what I heard overseas.’ That’s why we think ‘seeing is believing’ is so important,” he said.

“We won’t do anything big to try to push people to change their perceptions. We will take a step-by-step approach and let people tell their own authentic stories of Hong Kong.”

The board will not be adopting a wait-and-see attitude though.

The Hong Kong government has granted it an extra HK$820 million funding for the 2023-24 financial year, taking the total to HK$1.38 billion. The lion’s share, HK$1.2 billion, will be spent on marketing.

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‘Tastes have changed’

Official data before and after the pandemic show that tourists from the mainland consistently make up almost four-fifths of visitors, which Chinese University economist Simon Lee Siu-po called an “over-reliance”.

“We used to indulge in these numbers, talking about how much contribution mainland visitors made to our retail sector,” he said. “The money seemed to come so easily that we did not really have to think about our tourism portfolio or attractiveness to other international visitors.”

But the stronger Hong Kong dollar – given its peg to the US dollar – had forced the local tourism industry to rethink its reliance on visitors from across the border, and shopping as a pillar of tourism.

“A lot of people in the retail or real estate sector had hoped their industries would bounce back spectacularly as soon as borders reopened, expecting mainlanders to come and snap everything up. But we need to keep in mind that mainland China’s economy is struggling,” he said.

Meanwhile, destinations like Japan, Thailand and Taiwan, with their weakened currencies, were proving popular to visitors.

Lee said the spending habits among mainland visitors had also changed drastically over the past three years.

“They used to come and splurge on expensive jewellery, handbags and luxury cosmetics, but most of these products are not even made in Hong Kong,” he said.

Over the past three years, mainland spenders had found ways to bypass the city by shopping online or using purchasing agents to buy goods for them at the source.

“If you want a bag, there are people who can buy it for you in Europe. If you want a bottle of SK-II, just head to Japan,” he said, referring to a popular facial product made by the Japanese luxury brand.

Describing how mainland visitors’ tastes had changed, he said: “Instead of big spending and shopping every day, they are now here for more local, cultural experiences.

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“It is important to give tourists these local experiences, but we are weak in this area because for many years, this has not been our focus.”

The tourism board’s Cheng said surveys done with departing visitors over the first half of this year showed how their preferences had changed.

Art and culture, nature, and events and concerts topped their lists of things to do and places to visit in Hong Kong.

Tourists were partly drawn to new offerings such as the world-class M+ museum and Hong Kong Palace Museum at the West Kowloon Cultural District arts hub, the revamped Peak Tramways, new transparent carriages of the Ngong Ping 360 cable car and new attractions at the Hong Kong Disneyland Resort.

When the board asked 30,000 Hongkongers earlier this year what they would recommend to visitors, Tai O Village, egg tarts, Hong Kong-style milk tea, wonton noodles and hiking trails came up tops.

Lily Agonoy, managing director of Jebsen Travel, said: “New tourists are exploring local communities. For example, they like to go to Sham Shui Po and explore.”

She said they wanted to do what locals do – ride the MTR or bus, go to open-air dai pai dong food stalls and traditional cha chaan teng cafes.

“We should go inside Hong Kong and promote Hong Kong’s soul. If Sham Shui Po represents a part of old Hong Kong, then promote that,” she said.

Kenny Sham Ho-ki, general manager of online travel agency Klook, agreed that the tourism landscape had changed compared with before the pandemic and the city might need more time to find its footing.

“There needs to be a real focus on promotion through the internet and social media,” he said.

Pointing out that mainland visitors relied a lot on posts on Xiaohongshu and Douyin, the mainland version of TikTok’s short videos, he asked: “Do we have the corresponding materials to promote ourselves on these platforms? I think there is more we can do.”

But Sham was optimistic that Hong Kong’s appeal as a shopping destination would return, saying its zero sales tax policy and sheer volume of available brands were big pluses.

“There will come a time when the US dollar will weaken again, and shopping will regain even more of that attractiveness,” he said.

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‘Something as big as Taylor Swift?’

Like other experts, Sham suggested aiming for more purpose-driven travel, such as large scale functions, concerts, and conferences.

He said the government could play a role in attracting mega draws such as American pop star Taylor Swift, whose Eras Tour will stop in Singapore but not Hong Kong next year.

Her six shows in March meant thousands of visitors for the city state, he said, adding: “That was pulled off through coordination between many different parties, and the Singapore Tourism Board played a role.”

Apple Huang, a Guangxi native in her 30s who lives in Guangdong province, where she works as a make-up artist, took the high-speed rail to watch local diva Joey Yung Cho-yee’s concert at the Academy for Performing Arts in Wan Chai.

Arriving in the evening on the day of the concert, she planned to stay the night at a nearby hotel before catching an early train back to the mainland.

“If the trains ran later, or overnight, I would have left right after the concert,” she said. “Actually, a lot of people in my circle come here just to watch a show. It’s convenient, and there are more international performers in Hong Kong.”

While some global stars such as Lauv, Post Malone, Sam Smith and Korean girl group Le Sserafim have dates in Hong Kong later this year, the tourism board’s Cheng said it was not hard to see why others, such as Swift, skipped the city.

“Big superstars need to optimise their audience mileage,” he said, pointing out the venues for Swift’s two stops in Asia – Japan’s Tokyo Dome and Singapore’s National Stadium – could hold up to 55,000 people, whereas Hong Kong venues could take about 20,000 at most.

“We won’t have something of that scale until late 2024,” he said, referring to the HK$30 billion Kai Tak Sports Park which is being built and will boast a capacity of 50,000.

Cheng also said the meetings, incentives, conferences and exhibitions, or “MICE” sector, was among the best recovered so far, with bookings of the Convention and Exhibition Centre in Wan Chai and AsiaWorld-Expo near the city’s airport filled until the end of March next year.

The Convention and Exhibition Centre has said it expected to recover up to 80 per cent of pre-pandemic levels in terms of the number of exhibitions by the end of the year, although most events would remain smaller for the short term since large ones took time to plan.

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The major Jewellery and Gem World Fair was scheduled to return in September after moving to Singapore last year, while the RISE tech conference would take place in March 2025 after a six-year hiatus.

As for priorities in tourism strategies, Cheng said: “In terms of our promotions and investments, we want to have comprehensive global coverage about Hong Kong, and visibility. And the most important thing for people to know is that the buzz is back.”

That message will go out with a fresh round of the Hello Hong Kong campaign, which included the Airport Authority giving away 500,000 air tickets earlier this year to bring 1.5 million visitors.

“Hong Kong has established itself with the Hello Hong Kong campaign, the next step will be to contextualise the message in the Hello Hong Kong 2.0,” he said.