Tourist area consumption shows signs of weakness despite rising visitor numbers

Lei Cheok Kuan

Despite tourism authorities’ optimism about a strong summer rebound, with one economist projecting visitor arrivals could exceed the 2019 total of 39.4 million by year-end, the Times was informed that many member businesses saw sales decline in July.

Chairman of the Industry and Commerce Federation of the Macau Central and Southern District, Lei Cheok Kuan, noted that summer vacation is typically the peak season, but this year’s performance has not met expectations.

He told the Times that that while many businesses in tourist areas faced significant declines in sales during July, some dropping by over 10% or even 20%, there were still some stores that managed to grow.

He highlighted that these growth figures were positive when compared to both the same time last year and even to 2019, suggesting that not all businesses are struggling despite the overall downturn.

He noted that the market began to decline at the start of this year and expressed his belief that Northbound Travel for Macau Vehicles signifies a trend that cannot be reversed.

The economic data from Zhuhai indicates that its consumer market is recovering, largely due to increased spending by residents from Hong Kong and Macau who are traveling to Zhuhai.

In the first six months of the year, Zhuhai saw retail sales of RMB46.95 billion, a slight increase from the previous year, and its gross domestic product (GDP) reached RMB224.36 billion, ranking sixth in the Pearl River Delta region.

Policies that allow vehicles from Hong Kong and Macau to enter Zhuhai have significantly boosted cross-border shopping, according to the Zhuhai Bureau of Statistics.

In just May and June, mobile payment transactions from these residents exceeded RMB190 million, with a notable increase in the number of transactions.

Additionally, on weekends and holidays, stores like Sam’s Club in Zhuhai have seen a rise in purchases of daily necessities and food by visitors from Hong Kong and Macau.

Regarding market downturns, Lei disagrees with the idea that they reflect a decline in Macau’s appeal. He pointed to the continuous rise in tourist numbers as evidence of its enduring attraction.

As of July, Macau welcomed over 25 million visitors this year, representing a year-on-year increase of approximately 14%. During July, the peak summer season, the city recorded around 3.45 million visitors, with an average daily count exceeding 100,000, according to preliminary data. Lei emphasized that “it will only become more attractive in the future.”

He acknowledged that, in addition to consistently keeping pace with economic developments, “changes in consumption patterns are also irreversible.”

Lei noted that Macau residents grew up in a relatively privileged environment where competition with outsiders was minimal. However, the market has now transformed, making competition inevitable.

He emphasized that small- and medium-sized enterprises (SMEs) are no longer fighting alone; every community and industry must elevate their status. It is essential for everyone to continuously evolve, optimize, and improve their services and products to meet the demands of today’s Generation Z.

“If you want to remain competitive in the business world or survive in the workplace, you must adjust your mindset,” he said.

“In the past, it was enough to advertise and improve product quality and service, but that approach no longer works. Even with a good product, effective online promotion is essential,” he added.

Lei urged SMEs to assess whether their products meet modern consumer needs, explore viable paths forward, and contribute to the community to enhance the overall economy.

Meanwhile a consumption carnival was launched earlier this week.

From now until September 30, electronic payment users who spend MOP50 or more from Monday to Friday in the central and southern area can enter a lucky draw for three electronic coupons, with chances to win MOP10, MOP20, or MOP50. The coupons must be redeemed the following Saturday or Sunday with a minimum spend of three times the coupon value.

‘Significant recovery’

in an interview with the Macao Daily News, Davis Fong, director of the Gaming Research Institute at the University of Macau (UM), said that the tourism industry has seen a significant recovery this year.

He suggested that this upward trend could result in visitor numbers surpassing pre-pandemic levels by year-end.

According to the economist, alongside an increase in visitor numbers, there are emerging trends in consumption patterns, with growth in non-gaming spending outpacing that of gaming.

Fong emphasized that the strong recovery of the tourism industry stems from both the long-term development of infrastructure and ongoing investments.

This includes concessions, upgrading hotel facilities, and incorporating non-gaming attractions, which have helped Macau create a distinctive competitive advantage compared to other tourist destinations.

Looking ahead to the second half of the year, the scholer noted that the dual benefits of seasonal advantages and an improving economic environment are key factors to monitor. He expects that the stable recovery of source markets and rising disposable income will support consumption growth.

Another economist, Henry Lei, associate head of the Faculty of Business Administration at the UM, highlighted the importance of collaboration among the special administrative region government, chambers of commerce, tourism authorities, and businesses to draw more tourists to local communities.

He stated that by utilizing resources from the six integrated resort operators and adopting strategies such as the IP economy, improvements in service levels and consumer choices can be enhanced, allowing the benefits of tourism to extend to non-gaming businesses and community economies.