Emirates’ first Asian store is a sign of its wider ambition

Budrul Chukrut/SOPA Images via Zuma Press Wire/Reuters Connect

In a world where airlines have been veering away from bricks-and-mortar commerce, Emirates has bucked the trend with a new Hong Kong “travel store”.

The shop – all swanky 1,500 square feet of it – is a marker of the UAE carrier’s appetite for a growing and increasingly well-heeled Chinese market.

Despite a sluggish recovery on the Chinese mainland, its aviation sector will at some point return to the buoyant levels we saw in 2019.

Hong Kong is connected to 38 mainland Chinese cities, which can feed increased traffic to existing services. Emirates will be eager to grab as large a share of that market as it can by selling both connection and stopover opportunities. 

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Aside from the rapidly-growing direct China-to-Dubai route, China is also one of the growth markets identified by Saudi Arabia.

The Hong Kong retail store, launched in July and its first in Asia, could also help promote Emirates’ role as a connecting hub between China and Africa – a continent of increasing geopolitical and economic interest to China.

By Emirates’ standards, Hong Kong is a mid-sized destination. Its twice-daily direct service puts the city on par with the likes of Birmingham, Milan, Brisbane and Phuket. 

The Hong Kong shop opening may be part of a wider UAE reputational play

However, connecting traffic is always a big part of the Emirates business case. The closure of Russian airspace to both European airlines and Hong Kong-based carrier Cathay Pacific means that routing through Dubai is as good an option as any right now.

With large expatriate communities in both cities, the opportunity to combine a trip home from Hong Kong with a side-trip catching up with friends and business colleagues makes Dubai an attractive stop-off point. 

Last year 80 percent of passengers travelling to and from Hong Kong with Emirates connected onwards to other points on the network. Europe was the major onward destination for those travellers according to 2019 and 2023 booking data from OAG Traffic Analyser. 

The UK is the single largest connecting market to and from Hong Kong for Emirates. Last year it generated $18.3 million compared with $24.9 million, a drop of 27 percent on pre-pandemic 2019.

With passenger bookings falling by 30 percent compared with 2019, it suggests that the airline has not been able to impose a real increase in average fares over that time. 

Germany and Italy fall into second and third place as connecting markets. Interestingly, significant growth on the Hong Kong-US route highlights the Russian overflight issue, which has led to the halving of globally available direct flights.

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Airlines invest in markets where they either see opportunity or have a potential broader strategic interest. In this context, the Hong Kong shop opening may also be part of a wider UAE reputational play. 

For decades, Emirates has been the flagship brand for Dubai – the most visible part of a grand state growth plan. In this way, the new store could help build a stronger UAE brand profile in Hong Kong and mainland China, and among the Chinese investment community. 

On the whole, the history of Emirates has been characterised by calmly evaluated and effectively implemented logical decisions. The opening of a store at 3 Connaught Road, Hong Kong must have more to it than purely an airline play – or it could close rather quickly.

John Grant is partner at UK consultancy Midas Aviation