On Monday, Hong Kong canceled nearly 200 flights. The main reason for the cancellation is the major protest at its international airport. Therefore, Hong Kong airport shutdown brings terrible news for companies that operate in the financial hub.
There are thousands of pro-democracy protestors gathered at the airport. Meanwhile, the airport is Asia’s third busiest after Beijing and Tokyo. Hong Kong protest has happened for months. Besides, the crisis is already having a noticeable effect on the city’s economy. Moreover, some demonstrations have ended in violence.
The crowd at the airport started to dissipate by Monday evening. Yet, the canceled flights remind the risk to global businesses and the city tourism sector. There are more than 74 million passengers traveled to and from the airport last year. Besides, it also handles 1,100 passenger and cargo flights each day. The airport serves about 200 destinations around the world.
Moreover, the airport contributes 5% to Hong Kong’s GDP.
The worse impact from the cancellation is that travelers for months to come will cancel and rebook their flights to avoid Hong Kong airports.
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Hong Kong is home to seven Fortune Global 500 companies. It includes Lenovo (LNVGF) and CK Hutchison (CKHUY). By this cancellation, Hong Kong’s status as a hub for business travel is under a threat. That has happened even before the protests began.
Consequently, there is a higher number of business travelers are taking direct flights to mainland China. Some say that it is too early to assess the economic loss from the flight’s cancellation. However, it brings a negative psychological impact. For instance, some countries have issued travel warnings for the city.
Therefore, many worry that this will result in the fewer visitor. As a result, there will be fewer hotel bookings. Even if it is not forever, once the airport reopens the image has taken a hit.
Besides, this will shift the opportunities to places like Singapore. Singapore is an alternative gateway to China and the rest of Asia. Other than that, Shanghai and Shenzhen have also gradually developed major financial markets of their own.