The decline in retail sales in July, as indicated by the latest official figures, has led to renewed calls for Hong Kong to be more hospitable to tourists, especially those from the mainland.

Indeed, the retail slump has been widely attributed to the fall in tourist arrivals in the past several months due to a combination of factors. One is the appreciation of the Hong Kong dollar along with the greenback against most other major currencies. Another factor is the open display of hostility by some extremist groups toward mainland tourists.

To be sure, the violent demonstrations have largely fizzled out and the nasty rhetoric has been toned down in recent months. But such acts of hostility have left a bitter impression in the minds of many mainland tourists who, understandably, have chosen not to return.

The government, together with retail groups, has mounted a number of campaigns to entice tourists. But these have been largely ineffectual, as indicated by retail figures which have been in decline for five consecutive months.

Meanwhile, many shops in the major commercial and tourist districts, including some specialty boutiques of famous fashion brands, have closed down. This has prompted some economists to warn of massive layoffs in the retail sector in coming months.

Adding to the woes of the retail sector is the projected fall in domestic consumption because of growing concern about the worsening economic downturn in the second half of 2015 and beyond. The stock market's downward trend in recent weeks has not helped either.

Hong Kong has to count on tourist dollars to keep its retail sector - which, together with the tourism industry, is one of the city's biggest employers - in reasonable shape. So it pays to examine some of the key problems that have turned tourists away from Hong Kong.

Many of the problems, in fact, were created not by external factors but by the industry itself. Tourists are asked to pay high prices to stay in hotels, eat at restaurants and shop in boutiques. But more tourists are finding that they are not getting their money's worth compared with other major cities.

Tourists are finding the standard of service and the quality of the products in Hong Kong, including hotel accommodation and food, are not on a par with what the same money can buy in London, Paris or Tokyo. These disparities are growing as the Hong Kong dollar continues to appreciate against the yen, pound and euro.

To address the issue, the Hong Kong retail and tourism sectors will have to seek ways to improve their services and adjust the pricing of their products to make tourists feel that they are getting value for money. Tokyo is an expensive city. But there is no shortage of hotels or inns in the city that offer clean, safe and comfortable accommodation at reasonable prices. If a tourist does not want to splurge on fancy restaurants, he or she has a wide choice of more modest eateries serving good food that costs less than in Hong Kong.

More importantly, the standard of service in Tokyo is universally high and the prices in shops are clearly displayed. And the salespeople are polite to every shopper, local or foreign.

This is not the case in Hong Kong. There has been a proliferation of unscrupulous shops in the tourist districts - especially drugstores selling herbal remedies and exotic dried seafood - that prey on unwary tourists. Their well-publicized scams have greatly damaged the reputation of the tourism industry by tarring the whole retail sector with the same brush.

After years of an unprecedented tourism boom, Hong Kong merchants have become numbed by complacency. After months of a downturn in sales and tourism arrivals, they are just beginning to wake up to the need to adjust to the change.

They will need to move fast because the problems at home and on the currency front are going to get worse, not better.

The author is a current affairs commentator.

(HK Edition 09/02/2015 page9)