Inside Asian Gaming

January 2008 | INSIDE ASIAN GAMING Most people are familiar with the famous quotation about ‘Lies, damned lies, and sta- tistics’. So the news that Macau’s visitor ar- rivals exceeded 27 million in 2007—widely trailed in advance of a New Year press con- ference attended by Macau Secretary for So- cial Affairs and Culture Chui Sai On—should be treated with just a sprinkling of caution. It would though be churlish of this magazine not to acknowledge the achievement, which represents a 22.7% increase on 2006 arrivals even without the inclusion of December’s statistics which had not been announced at the time Inside Asian Gaming went to press. Raw numbers is one thing, but benefit per head to the economy is another. Macau currently has volume, but that doesn’t nec- essarily equate with quality. Using the third quarter of 2007 as an example, a staggering 26% of Macau’s 6.85 million visitors during that period described themselves as ‘unem- ployed or economically inactive’, according to Macau’s Statistics and Census Service (SCS). There is nothing in the previous sur- veys to suggest this was a statistical anomaly. The self-categorised jobless included house- wives, students and retired people. Another 21% defined themselves as ‘clerks’. A total of 22% of arrivals claimed to be professionals of managerial level. Only 3% of all visitors stated they had come to gamble, though it’s safe to assume that figure is massively understated—in particular by the responses from the 54.6%of Q3 visitors who came from Mainland China and probably feared too much candour would get them into trouble with the authorities back home. VIP power Considering that gambling is the chief revenue earner for Macau’s tourism indus- try (it brought in a total of MOP58.9 billion [US$7.36 billion] in the first three quarters of 2007), a tiny number of visitors are pro- viding the majority of that revenue. VIP bac- carat players accounted for 67.1% of the MOP20.3 billion (US$2.54 billion) income from games of fortune in Q3 2007. It’s difficult to be sure exactly how many VIP visitors there are, but one useful indicator may be the proportion of people who arrive by air. They accounted for 352,900 visitors in Q3 2007—just 5.1% of all arrivals. That num- ber in likelihood can be further adjusted down to account for non-VIP transit passen- gers and those Pearl River Delta residents re- turning from long haul destinations aboard budget airlines. At any rate, VIPs are likely to make up only a tiny fraction of Macau’s visitor num- bers andmust take up only a minute amount of space and resources. In other words, the ‘yield’ from those VIPs far outweighs the yield from the mass-market visitor. If every mass market visitor to Macau (for the sake of argument 6.85 million visitors minus 352,900 air travellers) had gambled in a casi- no in Q3 2007, their contribution per head— based on mass market gaming revenue for the quarter of MOP6.6 billion (US$0.82 billion)—would have amount- ed to MOP1,016 (US$127) each. Huddled masses Common sense suggests many mass- market visitors (presumably the unem- ployed) are spending considerably less than this on gambling. It’s difficult therefore to escape the conclusion that a significant seg- ment of Macau’s current visitor industry is actually given over to what can only be de- scribed as ‘junk tourism’—poor people who don’t stay overnight and hardly spend any money (even in casinos) and simply come to gawp at the skyline. In other words, many of Macau’s visitors may literally bemore trouble than they are worth.The amount of employ- ment they actually create for shops and ser- vice industries is likely to be miniscule when set against the time and cost of processing them at immigration and the strain they place on the territory’s infrastructure. In Q3 2007, day trippers, who made up around half of all visitors, spent on average just MOP570 (US$71) on non-gaming goods and servic- es—barely enough to pay for a single meal with wine at one of Macau’s chic new casino restaurants. One way to deal with this, of course, may be simply to price day trippers out of the market, in the way that Monaco, the Borderline Case Does Macau really need so many visitors? Visitor Stats