Macau hotels feel pressure as Zhuhai, Hengqin lure guests

[Photo: Ricaela Diputado]

Hotels on the Macau peninsula are facing pressure from expanding room supply and shifting visitor preferences, with occupancy rates and average daily rates declining in the first half of the year, according to industry leaders.

Wong Suk Yan, president of the Macau Hotel Association, told Macao Daily News that properties in areas including NAPE and the city’s historic districts have been particularly affected by the changing market dynamics.

These hotels recorded average occupancy of approximately 80% during the period, while room rates slipped by 5 to 6% compared with the same timeframe last year.

The softening demand comes as several new hotel properties have entered the market, steadily increasing Macau’s overall room inventory.

At the same time, a growing number of visitors are opting to stay across the border in Zhuhai and Hengqin, diverting a segment of the customer base that traditionally would have booked accommodations in Macau.

The pressure has been less pronounced in Cotai, where upscale properties have managed to sustain relatively stable occupancy levels, Wong noted.

The divergence highlights an uneven recovery trajectory across Macau’s hotel landscape, with peninsula properties confronting a twin challenge of supply expansion and cross-border competition.

The Dragon Boat Festival holiday, which typically provides a boost to the hospitality sector, was dampened by persistent heavy rainfall.

Wong said hotels situated near residential communities saw occupancy remain at around 80% during the three-day break, falling short of the levels recorded during last year’s holiday period.

Mainland Chinese travelers continue to form the foundation of Macau’s hotel guest base. According to Wong, nearly 40% of visitors are short-haul travelers coming from Zhuhai, Hengqin, and other Greater Bay Area cities, while long-haul mainland tourists account for approximately 20% of the total.

Among international source markets, South Korea currently ranks as the top contributor, followed by the Philippines and other destinations.

Wong emphasized that international visitors tend to have longer lengths of stay given the greater distances traveled, making them a strategically important segment for hotel operators.

To capture a larger share of overseas travelers, hoteliers are aligning with the Macau Government Tourism Office (MGTO)’s international marketing initiatives.

Wong revealed that industry representatives plan to participate in promotional events in Thailand, Indonesia, and Malaysia in August, with the goal of establishing cooperation agreements with local travel agencies to deepen penetration into Asian visitor markets.

Speaking about the July to August summer holiday season, Wong projected that peninsula hotels near residential areas could achieve occupancy of approximately 90%.

However, she cautioned that room rates are unlikely to see significant upward movement given the expanded supply base.

Hotels have rolled out a series of summer promotions designed to attract family travelers, who typically dominate travel during this period. Offers include discounted rates for extended stays, with reduced prices for second and third nights, as well as packaged deals combining accommodation with dining credits.

Wong also called on event organizers to stage more concerts, sporting events, and other activities in community areas, arguing that such initiatives could draw visitors into local districts and encourage them to prolong their stays in Macau.