Hong Kong’s protest movement has brought three different neighborhoods in the city to a standstill, closed several key city thoroughfares, and caused extended closures of schools, government, bank offices and businesses. But how much are the demonstrations—which are expected to continue while students and governments carry out settlement talks—really impacting the economy?

Chinese state-run media recently reported that “it is estimated” that the protests could cost the city HK$40 billion ($5.2 billion), without explaining its calculations at all. And a closer look at Hong Kong’s economy shows that figure could be somewhat exaggerated.

Hong Kong is predominantly a services-based economy, with businesses like real estate, import/export, and finance accounting for 93% of the city’s GDP:

The two industries that reportedly are feeling the most significant impact from the protests are tourism and retail. Together, “accommodation and food” and “wholesale and retail trade” account for just 8.6% of Hong Kong’s overall GDP. Those figures also includes food spending by locals and the wholesale retail business, which isn’t impacted by closed storefronts.

Tourists arrivals actually increased

Chinese mainland visitors make up an about two-thirds of the tourists to Hong Kong, and Beijing’s ban on tour groups, put in place days after the protests started, was expected to hit tourism hard. Hotels could lose about HK$100 million ($13 million) a day during the Golden Week holiday (from Oct. 1 to Oct. 6), one Hong Kong hotel group estimated.

Instead, the reverse seems to have happened. Tourist arrivals during the Golden Week were 1,159,952, the Hong Kong Tourism Board told Quartz—a 4.83% increase from last year’s Golden Week holiday, as mainland tourists poured into the city to shop, and in some cases check out the protests (paywall).

Some, but not all, retailers had a bad week

Hong Kong’s retailers had a 15-to-50% drop on sales between Oct. 1 and Oct. 5, the Hong Kong Retail Association estimated, with watch, jewelry, fashion, accessories, and catering reporting the largest drop. Some small businesses had an 80% sales drop, the association said.

Hong Kong’s retailers may have lost HK$2.2 billion ($284 million) in sales because of the protests in their first week, ANZ senior economist Raymond Yeung estimated. The Golden Week usually accounts for half of October’s sales, because of mainland visitors traveling to Hong Kong to shop, and “market anecdotes suggest that sales of the shops have declined by about 70%,” he said. On that basis, if the protests continue to the end of this week, they will cost another HK$1.1 billion ($142 million) in sales losses, for a two-week total of HK$3.3 billion ($426 million).

On the ground, though, reports are mixed, with some stores reporting that protests are actually boosting their sales. “Selling water alone has been enough to pay the rent,” one drug store owner in Causeway Bay told the South China Morning Post.

The stock market partially bounced back

Hong Kong’s Hang Seng Index, which covers over 65% of the total market cap of the Hong Kong Stock Exchange, fell a total of 2.59% during the Golden Week, including a Friday afternoon rally that cut the week’s losses nearly in half. But since then, the market has made up more of those losses, rising another 0.46% yesterday.

That’s mostly because the index is made up predominantly of companies based in mainland China. And while some of these companies lost millions in market cap, many traders and brokers in Hong Kong have been pulling in more in fees. That’s because the volume of stock traded in recent days has been considerably higherthan the volume traded in the past month—Friday, Oct. 3’s volume was approximately double that of the Friday before, for example, with 2.6 billion shares traded.

Much of Hong Kong has been completely unaffected

Exhibitors at Hong Kong’s massive convention center, which is not located far from the main protest site, are not being hit. Sotheby’s auction house is holding its annual Asia fall exhibition in Hong Kong from Oct. 4 to 9. “Exhibitions are open and well attended by our clients,” Esme Chau, a spokeswoman for the auction house, told Quartz. “We expect that the current situation will have little direct impact on our business.”

The auction set a record for the highest price ever paid for a wine lot—$1.6 million for 114 bottles of Romanee-Conti.

Overall, Hong Kong economic growth has slowed in recent quarters,(pdf pg. 7) as China’s crackdown on corruption curbed luxury spending in the city and the continued weak euro-zone hit exports and trading:

There’s also no doubt that Hong Kong’s Umbrella movement and the corresponding road blockades are definitely inconveniencing Hong Kongers, most recently by causing massive traffic snarls. But at least for now, fears that they are crushing the city’s economy seem overblown.

http://qz.com/275559/tourism-is-actually-up-during-hong-kongs-protests-and-other-economic-surprises/