Flight constraints, price pressures loom as tourism gears up for summer surge

The tourism sector is bracing for a vibrant summer season, with hotel operators projecting high visitor numbers and occupancy rates in August.

However, industry experts warn that growth momentum may be threatened by rising cost sensitivity, limited flight availability, and a need for deeper diversification across the visitor economy.

Macau welcomed 3.37 million visitors in May, marking a 25.3% year-on-year increase, largely driven by the May Day Golden Week, according to the Statistics and Census Service (DSEC).

Hotel occupancy reached 87.8% that month, while the average length of stay nudged up to 1.6 days.

The Macao Government Tourism Office (MGTO) reported a hotel room occupancy rate of 93% in May, up 2.8 percentage points from the previous year. However, while average room rates stood at MOP1,371.1, rates for five-star hotels saw a year-on-year decline of 1.2%.

Cheung Kin Chung, lawmaker and president of the Macao Tourist Agents Association, projected that occupancy rates could surpass 85% and potentially reach 90% on peak days in August.

“Today’s travelers are increasingly exploring a variety of options,” he said yesterday.

“[In this context,] the tourism industry is showcasing a specific trend where even during traditionally quieter periods, there is significant activity, while peak times see even more visitors.”

Rutger Verschuren

He noted that this pattern is expected to continue through the summer holiday period.

The tourism sector anticipates that visitor volumes during the summer will exceed last year’s 6.68 million.

“The industry is optimistic about the prospects for Macau’s tourism and confident in the future development of its cultural and tourism sector,” Cheung added.

At the press briefing, he reviewed the performance of the first half of 2025 and outlined expectations for the rest of the year.

Citing DSEC data, he noted a 4.5% year-on-year increase in hotel occupancy in May and emphasized that despite fluctuations in room rates, overall occupancy remained strong.

“These adjustments to room rates are reasonable,” he said.

Cheung Kin Chung

“There is also a slight increase in visitor stay duration, indicating stability in the market.”

Cheung also stressed the sector’s focus on pricing transparency and service coordination.

“Over the past two years, we have implemented strong measures, especially during peak demand periods, to enforce stricter price management requirements.”

According to official figures, Macau had 147 hotel establishments as of May 31, offering 45,200 guest rooms, a 3.7% decrease from the same period in 2024. From January to May, the average room rate was MOP1,349.9, a year-on-year drop of 4.2%.

While operators maintain pricing discipline, the industry is also preparing to expand offerings. This includes promoting cultural and family tourism, as well as widening the concept of study tours to target teachers and companies in addition to students.

Cheung emphasized that personalized travel experiences, such as small group tours, semi-independent trips, and in-depth cultural tours, are gaining popularity. “Travelers are increasingly selecting options that match individual preferences,” he said. “Macau provides a wide array of consumption options. This diversity enables travelers to enjoy their experiences in multiple ways.”

The visitor demographics are also shifting

As of July 8, mainland Chinese visitors made up the largest proportion of tourists in Macau at 71.6%, followed by visitors from Hong Kong at 19.1%, Taiwanese visitors at 2.4%, and international visitors at 6.9%.

The data indicates strong growth in international visitors, with a total of 682,400 in the first quarter, marking a year-on-year increase of 16.9%.

Notably, visitors from Southeast Asia and Northeast Asia, including the Philippines, Indonesia, Malaysia, and Singapore, showed significant increases of 10.4%, 36.5%, 18.2%, and 2.8%, respectively.

Additionally, South Korean and Japanese tourists experienced year-on-year increases of 33% and 23.6%, respectively.

However, limited flight availability is curbing even stronger growth from these markets.

“There are fewer flights to and from Thailand at the moment, and the same goes for Japan. The Japanese market could grow a lot more if there were more flights,” said Rutger Verschuren, vice-chairman of the Macau Hotel Association and area vice president – Macau & Hengqin for Artyzen Hospitality Group.

Verschuren also suggested that the recent closure of the Thai-Cambodian border to cargo and most travelers might lead to an increased presence of Thai visitors.

“The Thai government is now restricting entry to Cambodia […] and it may not be safe for some Thais to travel there,” he said.

Cambodia is a major gaming destination for Thai gamblers, particularly due to its numerous casinos located near the Thai border. Verschuren noted, “Those who still want to gamble may seek out Macau instead.”

Verschuren, who also serves as chairman of the France Macau Chamber of Commerce, cautioned that while this presents new opportunities, Macau’s heavy reliance on mass tourism may discourage affluent visitors.

“The city can feel overcrowded, especially around the historic areas,” he said. “High-end travelers want quiet, secret spots. The more visitors we get, the more congested it becomes, which could discourage some affluent tourists.”

He added that the hotel sector is experiencing significant volatility. “During Chinese New Year, for example, we focus on those five or six peak days, but the week before and two weeks after are often very quiet,” he said. “The same goes for summer holidays in August.”

Cost pressures are another concern.

“Even though hotels maintain healthy occupancy, visitors are not paying the same premiums as before, and our costs keep increasing […] room rates are under pressure,” Verschuren said.

Currency fluctuations may further strain spending power

Andy Wu of the Travel Industry Council said in an interview with Macao Daily News that the yuan’s depreciation is weakening mainland visitors’ purchasing power.

Wu also pointed out that greater spending power for Macau residents on the mainland could hurt local retailers. “This will put additional strain on Macau’s retail sector, particularly high-end retailers,” he said.

During the pandemic, staycations among locals had helped sustain hotel occupancy. That trend is now fading, said Verschuren. “Locals are less willing to pay tourist prices now,” he said.

Many travelers are choosing to stay in Zhuhai or Hengqin, where hotel rates and operating costs are lower. “Hengqin offers quality accommodations at more affordable prices, and improved border access makes it easier for visitors to stay there while visiting Macau during the day for shopping and sightseeing,” Verschuren noted.

Previously, Galaxy Entertainment Group chairman Francis Lui has also flagged Macau’s limited hotel capacity as a long-term concern.

With only about 48,000 hotel rooms, Macau lags behind comparable destinations like Las Vegas and Singapore. “We need to protect Macau’s premium positioning – not competing on prices, but quality and customer experience,” he said.

Verschuren, who also manages the Artyzen Habitat Hengqin Zhuhai, underscored the cost advantages in mainland operations.

“Mainland salaries and operating costs are generally lower, which translates into more competitive room rates,” he said.

Still, he warned that the boom in unlicensed accommodations poses serious risks. “Many apartments and offices are being converted into hotel rooms without proper certification,” he said. “This is particularly worrying when it comes to guest safety.”

Verschuren described one example of an office building near the Artyzen Habitat marketed as a hotel on online platforms like Ctrip.

“There’s no restaurant, no facilities, probably no CCTV, no fire alarm system, and probably no record of who stays in the room. It’s really ‘sleep at your own risk,’” he said.

“We should not wait until something bad happens and then start to change the rule. The rules are there already. It’s just a matter of enforcing them,” the hotelier warned.

Infrastructure and urban planning

He also pointed to infrastructure gaps within Macau. Although the city’s compact size is an advantage, issues such as traffic congestion and confusing public transportation still hinder visitor experience.

“Better signage at bus stops and reliable taxis could make a big difference,” Verschuren said. Improved public transport clarity would especially benefit non-Chinese-speaking tourists.

A broader issue is how to differentiate Macau’s various districts.

“Everyone knows Cotai,” the executive said. “But what about the peninsula? We just say ‘Macau,’ which is confusing because Macau is the whole city.”

He proposed branding the peninsula area stretching from the Amizade Bridge as the “Friendship Mile.”

“Macau is a cultural melting pot, a place of friendship between East and West. This could be the answer to the Cotai Strip – a unique district featuring 20 or more attractions, dining, shopping, and cultural experiences,” he said.

Such initiatives could help redistribute tourism benefits and support local SMEs.

“We need one larger destination where visitors can spend a whole day and discover the authentic Macau away from the casinos,” he added. Nadia Shaw & Yuki Lei