CNN dubs Macau economy ‘worst performing’ globally

U.S. broadcaster CNN has dubbed Macau’s economy “the worst performing in the world” in reference to the one-fifth contraction in gross domestic product (GDP) last year.
The report claimed that “these are gloomy times in Macau,” as the city continues to take a beating from “China’s anti-corruption campaign and slowing growth.”
However, while growth rates may be the slowest in the world according to CNN, neither gaming magnates nor ordinary residents seem too concerned with the slowdown. With regards to the latter average incomes were still rising at the end of last year, well into the gaming slump, and the unemployment rate has remained suspended around 1.9 percent.
It is in fact small businesses in the MSAR that have been most affected by the slowdown it seems, with some retailers saying earlier this year that they are not optimistic about a recovery in retail during the first quarter of 2016.
Although Macau saw the number of tourists arriving in the MSAR remain stable last year at approximately 30 million, Macau Government Tourism Office (MGTO) head Helena de Senna Fernandes reported that non-gaming visitor spending was down 17 percent in 2015.
Fernando Gomes, owner of popular Portuguese restaurant, Fernando’s, told CNN that he has only experienced a small decline in revenues, thanks to the fact that his restaurant is frequented by both locals and tourists.
Ricardo Siu, a business and economics professor at the University of Macau, told CNN that about 60 percent of Macau’s economy depends on the gaming industry, and another 11 percent on related sectors like retail, hotels and restaurants.
“We’ve got no buffers – all our eggs are in one basket,” added Malcolm McLaughlan, general manager of the Grand Coloane Resort. “To me that’s the manifestation of Macau being a one-trick pony.”
Analysts say that Macau’s attempt to rebrand itself as less of a gaming hub and more of an ‘all-in-one’ tourism and leisure destination has a long way to go.
The CNN report added that, to make matters worse, a host of new resorts are slated to open this year, including The Parisian. The influx of new rooms is making the market tougher by providing an oversupply and an collapse in room prices.
Malcolm McLaughlan said that with fewer tourists coming through he’s cut room rates by about 30 percent, but he still hasn’t been able to attract enough customers. DB