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More than 845,000 mainland Chinese tourists have poured into the world’s largest gambling center since the China National Day holidays known as Golden Week began Oct. 1, with growth accelerating to 17 percent over last year. The surge came as the Occupy Central pro-democracy movement pushed Hong Kong into its worst political crisis in decades and cut its rise in holiday week visitors to 6.8 percent, compared with 18 percent last year.
“Occupy Central has boosted the retail market and brought
more mainland Chinese to Macau,” said Lei Kuok Keong, who plans casino trips for high-rollers and is also vice chairman of the Macau Gaming Industry Frontline Workers union. “Some Hong Kong people who wanted to avoid the protests also came to Macau. That has helped boost the visitor numbers to casinos.”
That’s been a dose of relief for the former Portuguese colony, which is experiencing its worst slump in casino revenue in five years. President Xi Jinping’s nationwide graft crackdown has squeezed high-stakes gamblers, who account for more than 60 percent revenue in China’s only enclave of legal gambling.
Tourists walk past a casino in Macau, China.
Mass Market
Casino operators are shifting their focus to China’s growing middle class. That means catering to couples, families and gamblers who bet thousands of yuan instead of millions, a “mass-market” strategy adopted long ago in Las Vegas. The trick has been drawing enough people to make up for the drop in high-rollers.Take Jerry and Joycelyn Lu, who arrived in Macau from the eastern city of Nanjing with their two young children Saturday. The family expected to spend at least 30,000 yuan ($4,900), including a stay at the Sheraton and 8,800 yuan for a Tissot watch. Jerry Lu said he would only spend about 1,000 yuan in the casinos, a sum he had already lost.
“We are not very keen on gambling,” he said. “We would prefer to spend our money on dining and shopping.”
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Revenue Decline
The average daily revenue of Macau casinos was down an estimated 33 percent year on year during Golden Week, Cameron McKnight, a senior gaming analyst for Wells Fargo Advisors LLC, said in a note yesterday. McKnight said fewer high-stakes players were visiting casinos.Sands China had almost 1.5 million visitors at its properties in the first six days of the holiday, an increase of 9 percent for the same period last year. That’s the same number of visitors that it attracted in the entire seven-day break last year, when it recorded a 23 percent rise.
Luxury Shops
During a visit to four Macau casinos Oct. 6, tables with lower minimum bets had more gamblers than those with higher ones. Customers were scarce in the luxury shops at the Wynn Macau, with a few customers browsing Louis Vuitton bags and Jaeger-LeCoultre watches.Similarly, the economy section of a Shun Tak ferry from Hong Kong was almost full while about two-thirds of the more expensive superclass seats were empty. Macau is located about 60 kilometers (40 miles) west of Hong Kong, roughly an hour’s journey by ferry.
This year, more than five times as many Golden Week visitors arrived in Macau directly from the mainland. That may help explain why the gaming hub’s traffic soared while Hong Kong’s fell.
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Jewelry Sales
As major Hong Kong retail chains reported declines in holiday sales of as much as 50 percent, shops have fared better in Macau.Chow Sang Sang Holdings International Ltd. (116) saw sales at its five Macau jewelry stores rise more than 10 percent, with more than 90 percent of customers hailing from the mainland.
“Shoppers in Macau were more willing to spend compared to those in Hong Kong,” Dennis Lau, director of sales operations for Chow Sang Sang Jewellery Group, said by phone today. “Our Macau sales increase may be partly due to tourists avoiding Hong Kong amid protests.”
For some tourists, like Zhao, a businessman from the southeastern city of Xiamen, Macau offers something Hong Kong can’t match: casinos. He said he plans to spend more than 50,000 yuan eating Portuguese food, getting massages and gambling at places like SJM Holdings Ltd.’s (880) Grand Lisboa.
“The protests don’t affect me at all,” said Zhao, who would give only his surname. “I have no plans to visit Hong Kong anyway.”
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