HONG KONG—The city’s government cut the Covid-19 quarantine period for inbound travelers to three days from seven, easing a restriction many saw as excessive but falling short of what businesses say is needed to restore the connectivity vital to its role as Asia’s leading global financial center.

From Friday, travelers arriving in Hong Kong will be allowed to leave their quarantine hotels after three days, officials said at a briefing Monday.

Over the following four days, they won’t be allowed into places now requiring a vaccine pass, such as gyms, bars and restaurants, but they will be able to go to work, shop at supermarkets and use public transport, provided they test negative for the coronavirus.