Tourist area SMEs rebound as residential businesses face 50% losses

A research report has noted a polarized post-pandemic recovery for small- and medium-sized enterprises (SMEs), as businesses in tourist areas thrive from returning visitors, while those in residential neighborhoods face revenue drops of over 50%, prompting a separate proposal to transform the Taipa Old Village area into a commercial zone.

The Collective Wisdom Policy Centre (CWPC) released a report last week titled “Assisting Local SMEs in Improving the Business Environment,” highlighting that local SMEs are grappling with rising operating costs, shifts in tourist consumption patterns, and high online marketing expenses.

Citing data from the Statistics and Census Service Bureau (DSEC), the report revealed that while SME profitability improved last year, significant structural imbalances in economic recovery persist across regions and industries.

Businesses in tourist areas have experienced recovery, whereas those in neighborhoods continue to face difficulties.

The think tank conducted field visits to 700 SMEs in the first quarter of this year and integrated their findings with official data. The group discovered that rising raw material costs – particularly in the catering sector – are a major concern. Additionally, consumer spending has decreased as residents choose to travel within mainland China and adopt a more cautious approach to spending.

Despite SMEs generating revenue that now exceeds pre-Covid-19 levels, many are still unable to overcome their previous financial losses.

A total of 1,098 companies were dissolved last year, marking a 24% increase from 2019. It highlighted a slowdown in company growth and indicated that changes in the post-pandemic business environment have contributed to this trend.

By the end of last year, outstanding loans to SMEs reached approximately MOP28 billion across more than 2,800 enterprises.

The expiration of pandemic-related debt repayment deferrals, along with the lack of ongoing low-interest financing support, presents significant challenges to the survival and growth of these businesses.

The report recommends adopting mainland China’s direct subsidy strategies, such as offering price subsidies for residents purchasing local specialty products and durable goods to stimulate consumption. It suggests providing tax reductions or deferrals for local SMEs, especially in tourism, retail, and catering, while referencing past community consumption programs to enhance the flexibility and duration of consumption activities. Furthermore, the report proposes introducing limited-quantity offers for tourists and exploring support measures for both individual travelers and tour groups.

Cunha Urban District

Meanwhile, the Macau Industry and Commerce Federation of Islands held a press conference on Friday to unveil its “Sustainable Development Study for the Old Town Area of Taipa.” The proposal aims to redefine the area – including Rua do Cunha, Rua do Regedor, Rua Direita Carlos Eugénio, and the Taipa House Museum – as the “Cunha Urban District,” establishing a commercial zone with a strong brand identity.

The association’s research suggests applying successful theme park models, incorporating professional master planning, visual design, and marketing strategies to create a family-friendly leisure destination. For instance, iconic installations could be placed at the four main entrances of the Cunha Urban District to attract visitors.