Analysts divided over visitor tax impact

Analysts of the tourism and gaming industries are seemingly divided when it comes to a proposed tax on visitor arrivals in Macau.

The views, aired this week, follow last week’s release of the results of a feasibility study on a visitor tax, which found that most people in the SAR were in favor of such a measure, but most industry operators opposed it.

One person who believes that creating a tourism tax would be a bad idea, especially for the conventions and exhibitions sector (MICE), is Glenn McCartney, Associate Professor in Integrated Resort and Tourism Management at the University of Macau.

According to the scholar, “The government should clearly announce some measures or policies [on the topic], it is not clear why a tourist tax is to be created in Macau. If you have a conference in Macau with 1,000 attendees, that’s a 100,000 patacas fee,” he said, on the proviso that the proposed visitor tax is set at 100 patacas.

“In that case, I can consider another destination,” he said in comments to Hoje Macau. “[The tourism tax] will have consequences and an impact.”

As for the impact on gaming, McCartney thinks that a visitor tax would be settled by the gaming operators as “the casino high-rollers won’t pay for it. Maybe the casinos will pay for them, but in that case, we have an overcharge to the industry that might not be happy with it.”

He added that it will all be dependent on the measures taken by the government.

For McCartney, there are several other ways to control the number of visitors. One  such way is through smarter branding. “We have multiple events happening but there isn’t a unified image of what Macau is,” he said.

Local economist Albano Martins is in agreement with McCartney. Martins said to the same news outlet that the idea to enforce such a tax was a sign that the authorities had run out of ideas.

For Martins, the tax is highly ineffective. He compared it to “trying to empty the ocean using a cup.”

For the economist, what Macau needs is not to reduce the number of visitors, but to avoid them clustering on some limited areas of the city.

A different opinion was expressed by a group of analysts from Sanford C. Bernstein, Ltd. In a statement, they noted that the enforcement of a tourism tax would not have a significant impact on gaming operators or the revenues from gaming.

Analysts Vitaly Umansky, Kelsey Zhu, and Eunice Lee predict that such a measure could only have a small impact on the low-end tourism, such as visitors who spend only a few hours in the region, but it would not affect the main engines of the local economy.
The study, conducted by the Macao Government Tourism Office (MGTO) showed that the large majority (95%) of residents are in favor of the creation of a tourism tax in Macau, while 80% of the tourism operators opposed it.

The view among tourists was equally conclusive, with about three-quarters of those surveyed admitting the tax would affect their willingness to visit the SAR. About half of the respondents said their intention to visit Macau would be affected by the tax, while a further 25% said it would “depend on the actual situation,” MGTO said.

MGTO director Helena de Senna Fernandes has previously hinted that the purpose of the tourist tax if levied, would not be to reduce the number of visitors. Instead, it would be used as a fund for urban development matters. The tourism chief has also said on several occasions that she opposes the introduction of a visitor tax.

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