Touristification and retail diversity: theory and evidence

Abstract This study explores the impact of touristification on retail diversity in neighbourhoods, presenting a species-area relationship model to demonstrate how tourism-driven changes can negatively affect local residents by displacing unique local retailers. Empirical regression analysis, using differences-in-difference (DID) models and neighbourhood clustering to define retail areas in Hong Kong, found that tourist-concentrated areas have fewer diverse high-street retailers. The result argues that the trend of touristification, which often leads to a decrease in retail diversity, could undermine the resilience of a tourism destination. This is evidenced by the noticeable downturn in the retail industry seen in many previously over-touristed cities after the pandemic. The findings prompt further research into tourism’s role in changing retail landscapes, particularly in touristified neighbourhoods.