Hong Kong could regain relevance as a global financial center. The city is finally announcing today that it will be removing mandatory hotel quarantine for arrivals beginning Monday, September 26th.
Taiwan took a similar step Thursday with the decision to end mandatory quarantine from October 13. Taiwan will now implement a “0+7” system with a seven-day self-monitoring upon arrival.
Hong Kong adopts a “0+3” plan. For the first time since March 2020, travelers can leave the airport immediately under their own steam, including by public transport. Their mandatory health code app will be “yellow” for 3 days, banning them from high-risk places including restaurants and bars. But they can stay where they want and the code will turn “blue” if all their tests come back negative.
And it’s about booking trips to Asia – Japan will again allow visa-free individual trips, it is said today, with effect from October 11th. This eliminates the obligation for foreigners to enter the country on group trips.
Japan only started allowing visitors at all in June, as long as they came on travel agency tours. It will now remove its daily cap on visitors, which currently stands at 50,000 arrivals. And a negative Covid-19 test is no longer required before departure as long as the person is vaccinated.
The impact on travel and recreation stocks should be profound. Due to the high volume of traffic causing the website to crash, I am currently unable to visit Hong Kong’s flagship airline Cathay Pacific (CPCAY) and HK:0293 website. I was placed in a waiting room with a 15 minute deadline before I could access the site.
Watch for a rebound in consumer stocks in Tokyo, Taipei and Hong Kong, although it’s a long way back for these companies. Cathay issued a statement welcoming the move by the Hong Kong government. The airline plans to add more than 200 pairs of flights to both Asian and long-haul destinations in October. Thanks to Japan’s rule changes, Cathay will resume daily flights to Tokyo Haneda Airport starting November 1, and ski trip-friendly flights to Sapporo four times a week starting December 1.
While Hong Kongers are clearly desperate to travel again, places like Japan and Thailand are yet to welcome back their main source of travel business, Chinese travellers. That’s because mainland Chinese citizens are still required to undergo a two-week state-organized quarantine upon return, which precludes voluntary travel.
Cathay stock was initially hit by the pandemic. It fell 55.2% from late 2019 to early August 2020. However, since the end of October 2020, it has recovered solidly, meaning it is now “only” 22.6% below its pre-pandemic level. The recovery should continue.
It and other travel and consumer games have been absolutely slammed by Hong Kong’s long, long insistence on forcing travelers into lousy hotels with up to 21-day quarantine at their own expense. The quarantine has very slowly and gradually reduced to the current three night stays, but that too will be lifted from Monday.
Japanese Prime Minister Fumio Kishida, who attended elementary school in Queens while his father worked for the Japanese Ministry of Commerce in New York City, outlined the changes in Japan’s travel policy in a speech to the New York Stock Exchange. Kishida is in town for the United Nations General Assembly he addressed on Tuesday.
Japan will host the G7 for a summit in Hiroshima next year. “I am determined to make Japan as prosperous and dynamic as my childhood New York and as the NYSE itself,” he said at the stock exchange.
Hong Kong will host a financial conference in November hosted by its central bank equivalent, the Hong Kong Monetary Authority. One of the city’s biggest sporting events, the Hong Kong Sevens rugby tournament, is also set to take place in November, for the first time in three years. Hong Kong literally would not have had enough quarantine hotel rooms to handle the incoming passengers for the two events. So, like many Hong Kong government decisions, lifting the quarantine is only necessary.
Kishida really played in front of the crowd at the NYSE. He said he takes the example of his “favorite player” Shohei Ohtani to tell him his new form of capitalism needs to “hitch and score” by promoting both growth and sustainability. Kishida, chosen as Japan’s 100thth Prime Minister last year, campaigned to promote this new form of capitalism, although no one knows exactly what that means. He first said he had a broader distribution of wealth in Japan as his main goal. But he changed his definition to explain that the “new capitalism” requires the public and private sectors to work together.
OK then. What we can gather from today’s and yesterday’s announcements is that East Asian governments will no longer cripple their economies with travel restrictions.
Mainland China is of course the extreme outlier. China continues to require a quarantine for everyone arriving from abroad, currently 14 days. A period of self-quarantine and health surveillance follows, with restrictions on your activities gradually being lifted. Of course, multiple rounds of Covid-19 testing are required.
I underwent a rather ridiculous round of Covid tests on my return from Europe in Hong Kong last month. There were five PCR tests, daily RAT tests for 10 days, plus a mandatory three nights in an expensive hotel. And I was only allowed to fly back to Hong Kong from Amsterdam primarily because I’m vaccinated and after finding a place to do a PCR test. That was difficult as the Netherlands and Europe in general have done away with testing requirements to allow life to get back to normal. My family was the only person tested at the facility in downtown Amsterdam, with a member of staff doing the check-in, administration and testing themselves.
These rules for traveling to Hong Kong were very complex, expensive to follow and meant that travelers risked disrupting all their plans if they unexpectedly tested positive. A friend of mine was in this exact situation in August. Her PCR test came back positive the night before she flew to Hong Kong, causing her to panic. Strangely, the testing lab sent an email later that night instructing her to ignore the positive test and that the lab would do it again the next day. Somehow the test came back negative the next day – although the lab didn’t explain, the first test must have given a false positive (she already had Covid) or been contaminated. But it left my friend unsure on the morning of her flight if she could walk.
All those tires were in dramatic contrast to the attitude I had when I arrived in Europe this summer. My family of four had PCR tests done in Hong Kong prior to departure as our first European port of call, Portugal, did not officially recognize Hong Kong vaccination certificates. The tests, which cost around $50 each in Hong Kong, proved useless as nobody checked the Vax certificates or test results when we arrived in Lisbon. There are no checks to Britain – at least the rules were clear. The Netherlands also reportedly required vaccination certificates on arrival from post-Brexit Britain. But again, no one checked anything upon arrival.
The bottom line is that Europe is open and easy to travel around. Yes, Covid is an issue. But it’s a manageable disease, much like many others that citizens struggle with.
Hong Kong, Taiwan and Japan have simultaneously concluded with these announcements that Covid is here to stay. Likewise, hospital admissions and deaths are rare with high vaccination rates and on a manageable scale for the health system.
Asia is getting on with life, as is Europe, albeit with a few months delay. It’s time.
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