Inside Asian Gaming

inside asian gaming April 2015 8 Feature In Focus It’s been lucrative for Macau to put so many eggs in the mainland basket but not necessarily prudent, Ms Mendoza, a Macau-based marketing consultant, contends. “Historically Macau’s reliance on China has always been risky,” she says, noting that the mainland’s yearlong cutback on visas to Macau frommid-2008, coupled with the global economic slump, hit Macau’s economy hard. “Less reliance on one major economic feeder to me sounds like a healthier path to growth in long-term business and economic development.” The dangers to Macau’s economic health of relying on the mainland became apparent again as gaming revenue fell for the first time since liberalization last year to $43.9 billion amid Beijing’s crackdown on graft and undocumented fund outflows. In the longer run, Chinese travelers’ increasing sophistication and thirst for more unique experiences, particularly at the high end, plus increased regional gaming options seem destined to reduce their visits to Macau. In a report issued in January, CLSA estimates the 2014-20 compound annual growth rate for mainland arrivals to Macau at 9%, less than half the brokerage’s growth forecast for North Asia, Western Europe and Australasia, though double the rate for Hong Kong. In addition to reducing risk, drawing a broader spectrum of visitors can make Macau a more attractive destination, Macau Institute for Tourism Studies (IFT) Assistant Professor IpKin Anthony Wong says. “It helps to diversify tourist experience and tourism products: Mainland Chinese have a strong preference for gaming and shopping. We do want to attract tourists who are also interested in other aspects of Macau: culture, food, event, sightseeing and heritage.” “This year, MGTO will continue to explore international markets while developing different visitor segments within a market so as to diversify our visitor sources,” the government agency says. “Given the great potential of the Asian markets in the tourism industry, MGTO will allocate greater efforts in developing the Asian markets in this year.” The convention segment, classified under MICE—for meetings, incentives, conventions and exhibitions—was supposed to be a key to diversification in terms of both non-gaming revenue and broader geographic reach. MICE helped transform Las Vegas into a more multifaceted destination and lift non-gaming revenue to nearly two-thirds of total revenue, but it’s yet to conjure similar magic in Macau. Mainlanders have fueled Macau’s shopping boom; even with last year’s pullback, their MOP1,078 per capita shopping spending doubled that of any other group. Collectively, mainland visitors accounted for 33.8% of Macau’s total retail spending last year. In the longer run, Chinese travelers’ increasing sophistication and thirst for more unique experiences, particularly at the high end, plus increased regional gaming options seem destined to reduce their visits to Macau.