How COVID-19 Reshaped Cross-Border Consumption Dynamics: Evidence from Hong Kong’s Retail Property Market

Siu Kei (Kelvi Wong, Yidi Yang and Lok Yiu Leung

ERES from European Real Estate Society (ERES)

Abstract: Cross-border travel functions as a form of shopping tourism, fulfilling both individual economic needs and leisure pursuits while substantially contributing to the valuation of retail property—a critical subsector of real estate. As an international financial hub and China's Special Administrative Region (SAR), Hong Kong possesses a distinctive retail ecosystem tailored for cross-border consumption. The cross-border flow between Hong Kong and Shenzhen, its neighboring city within China's Greater Bay Area, has historically served as a vital socioeconomic connection, although it was suspended during the COVID-19 pandemic due to public health precautions. This study investigates the impact of cross-border travel on the performance of Hong Kong’s retail property market, focusing on the periods before the pandemic-induced lockdown and after the reopening of border checkpoints. By analyzing retail property performance indicators and transaction data, our findings reveal that the retail property market is more strongly influenced by inbound travelers-specifically, mainland tourists visiting Hong Kong- than by outbound travelers, namely Hong Kong residents traveling to Shenzhen. In addition, the more significant price decline in shopping areas after the reopening suggests that the retail market performance is particularly sensitive to inbound travel. These findings offer policymakers actionable insights for designing tourism strategies to revitalize Hong Kong's retail sector.

Keywords: COVID-19; Cross-border travel; Inbound travel; Retail property market (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2025-01-01
New Economics Papers: this item is included in nep-cna, nep-sea, nep-tur and nep-ure
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