Foreign currency depreciations, intense regional competition and rising antagonism from "localist" groups have contributed to a worrying drop in the number of tourists coming to Hong Kong last month.
Latest statistics on Monday showed that overall visitor arrivals from June 1 to 28 fell year on year by 1.9 per cent.
Experts and industry leaders warned that the city was in an unfavourable position when competing with other regional tourist destinations. They said tourism had also suffered from the unfriendly treatment shown to mainland visitors.
June's drop was the second year-on-year monthly drop for the year. In March, visitor arrivals slid 8.7 per cent. Leading the decline was a 10 per cent drop in mainland visitors coming on the individual visit scheme. This follows a 5 per cent fall in May.
Secretary for Commerce and Economic Development Gregory So Kam-leung warned of an "accelerating decrease" - a trend he said was very concerning. So has pledged to organise more festive events to help Hong Kong stay attractive to visitors.
Mainland tourists are Hong Kong's primary source of visitors, with 47.2 million arrivals in 2014. They accounted for 77.7 per cent of all arrivals, according to the Hong Kong Tourism Commission (HKTC).
Industry experts felt the main reason for the decrease was mainland visitors having destinations to choose from.
The Hong Kong Polytechnic University (PolyU) School of Hotel and Tourism Management Associate Dean and Chair Professor Song Haiyan said many countries have relaxed their visa policies for Chinese nationals, which has attracted large number of mainland tourists.
Monetary factors are also vital, Song suggested. Currencies like the Japanese yen, South Korean won and euro have dropped, undermining Hong Kong's competitiveness as a shopping destination.
A fiercer competition in the regional tourism market is ongoing, where Japan and Thailand both recorded a more than 90 per cent increase of mainland visitor arrivals in this year's first quarter. Vietnam and South Korea also saw a 60 per cent and 36 per cent rise, respectively, according to the HKTC.
Meanwhile, the 2014 PolyU Tourist Satisfaction Index released by the School of Hotel and Tourism Management dropped 1.46 points from 75.96 in 2013. This represents the largest decline in the six years since the index was launched in 2009.
This showed that political unrest such as last year's illegal "Occupy Central" movement made tourists - from the mainland and other countries - feel unwelcome. They have subsequently become reluctant to choose Hong Kong as a destination, Song said.
In the long term the slowing trend will "correlate" to other industries. This may have a negative effect on the city's economy as a whole, Song suggested.
Industry players are already anticipating a "cold winter". Hong Kong Retail Management Association Chairperson Caroline Mak Sui-king said in the past half year a number of local small retailers had closed their stores due to declining tourist numbers.
She fears a wave of business closures in the following months and hopes the radical groups in the city will end their protests.