Businesses choose to close during CNY due to lack of profitability

During the recent Spring Festival Golden Week (CNY), many local businesses chose to close in order to celebrate the holiday, foregoing potential sales opportunities.

In response to growing calls for government support for small and medium enterprises (SMEs), the Times investigated why these businesses decided to shut down instead of seizing the opportunity to boost sales.

Eric, a restaurant and bar manager, operates in the area connecting the Ruins of St. Paul’s and other historic monuments to the city center.

Located in an area of high tourism flow, Eric explains why his establishment was closed for seven days.

“We have closed from January 26 and reopened only on the seventh day of the New Year [February 4] as Monday [February 3] is our regular weekly off,” he explained.

When questioned by the Times about what drove this decision to close for a whole week, Eric elaborated, “Over the years, we’ve realized that staying open during CNY doesn’t make financial sense for us. This is for two reasons. First, the slight increase in sales we might see does not justify the additional expenses for staff. Second, most of our employees are from mainland China and have family there, so CNY is a very important holiday for them.”

“Not being able to visit their families would create significant issues and conflicts. We choose to avoid that and instead take the time to rest, evaluate the business, and come up with new ideas,” he added.

When asked if this decision negatively affects the business due to its location in a tourist area, the manager acknowledged that it does. However, he pointed out that because most group travels are pre-arranged, his establishment does not benefit, as it isn’t part of those plans.

“We realized that being in this area highly frequented by tourists is not necessarily good for our business. You see, most tourists travel in these organized groups, and even if they want to stop at our place to eat or drink, they can’t,” he said.

“Everything in these groups is pre-arranged, and they have specific places to visit and places to be at this time or that time. For small snack shops, this might be fine, but it doesn’t fit with our business concept,” he added.

The manager further explained that his business caters mainly to locals and regular customers who want to enjoy a relaxing time or organize a private gathering or birthday party, among other celebrations. This concept does not cope with the tourism “rush.”

“Besides, most of our regulars [customers] are also out of Macau this season. It just makes sense for us to follow the holidays for the sake of everyone.”

Also interviewed by the Times, a manager of several businesses in the same area, who wished to remain anonymous, stated that out of the six different establishments he oversees, only one stayed open during the holidays.

“We manage six different establishments in this area. Only one remained open during the first three days of CNY; the others closed for the public holidays, and in fact, two of them have not yet reopened since the break,” he explained.

The same company representative explained that only the main restaurant remained open due to its high demand and reservations during this period. In contrast, the other establishments closed to allow staff time off.

“I can tell you that the other businesses, which also include retail and food & beverage, barely break even most months. Adding the extra costs of triple-pay wages during this period would severely impact operations,” he said, adding that feedback from other local merchants showed only a 30-40% increase in sales.

He also noted that, since the company owns several small businesses, closing some allowed them to redistribute staff to the open locations, ensuring enough personnel to handle the higher demand during the season.

Staff shortages also contributed to the decision to close another restaurant near the city center.

The shopkeeper explained that most staff prefer to enjoy the holiday, and without sufficient personnel, the restaurant had no choice but to close.

As the Times reporter experienced in loco, a visit to the city’s old neighborhoods, even six or more days into the New Year, still finds many establishments closed.

Signage indicates that the CNY is the motif for temporarily halting business operations.

During the eight-day Spring Festival Golden Week, statistics show Macau welcomed nearly 1.31 million visitors. Average daily arrivals were about 164,000, down 3.5% from last year but close to the 2019 level of 171,702. Among the visitor arrivals, the volume of mainland visitors exceeded one million overall.