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Uphill job to convince tourists to return

Only eight per cent of the Mainland tourists that have been to Macau plan to return, according to a recent CLSA report on Mainland travellers

Macau is facing the problem of the low future retention of Mainland tourists, as only eight per cent of PRC visitors plan to return. According to the report on Chinese Tourists in 2016 from brokerage firm CLSA, Macau is losing its appeal for Chinese travelers, who are becoming more daring in experiencing different destinations.
“Slightly concerning is the low future retention rate. In our Chinese tourists survey, only 8 per cent of those who visited Macau plan to return vs. 37 per cent for Japan, 26 per cent for South Korea, 32 per cent for Thailand and 25 per cent for Hong Kong”, the study by analysts Aaron Fischer and Marcus Liu notes.
For the study, interviews were conducted with a total of 401 “experienced” Mainland travellers from 25 Chinese cities. From these interviews, the bad news for Macau is that as a future travel destination it has dropped out of the top 20 choices. Currently, the territory only occupies 21st place, while South Korea is the top choice and Hong Kong takes 5th place.
According to the CLSA report, in future Macau will have to rely more on Mainland tourists from provinces other than neighbouring Guangdong in order to achieve good results.
“The penetration rate of Macau by Mainland tourists is around 1.5 per cent. However, Guangdong is reasonably high at 9 per cent with China excluding Guangdong at only 0.9 per cent. Clearly, we see greater opportunity in these provinces”, the analysts concluded.
Attracting visitors from other provinces, however, will require the industry to be able to increase the overnight average stay for tourists in order for it to be worth their while to travel so far. However, one of the problems related to this, as perceived by visitors, is the room rate in Macau.
Hotel rooms needed
“Clearly, there are problems with hotel room prices with 61 per cent saying hotel room prices are too high and 48 per cent of those who didn’t stay overnight saying it was because of the high room rates.”
At the moment, an average of 1.5 days is spent in Macau by tourists, while in Hong Kong it is 3.3 days, with 3.6 days in Singapore and 3.2 days in Las Vegas.
In relation to this problem, the study stressed that Macau “needs to add more hotel rooms; and improve its non-gaming entertainment offering and infrastructure to support its drive to become one of the world’s leading tourist destinations.” Chinese outbound to reach 200 million
In 2020, CLSA expects the number of Chinese outbound tourists to reach 200 million. The brokerage firm expects a 9 per cent compound annual growth rate in terms of outbound tourists from the Mainland until 2020.
However, for Hong Kong and Macau the compound annual growth rate is expected to stay at 3 per cent, while all the other destinations will grow at 16 per cent.
The impact on the number of visitors to the Chinese Special Administrative Regions has much to do with the increasing competition from other destinations as well as internal problems.
“We are structurally negative on Hong Kong due to a lack of new attractions, increased competition, the strengthening Hong Kong dollar and negative attitudes towards Mainlanders. While Macau is doing more to improve its tourist offering, it still faces challenges to attract non-gamblers. As a result, places like Japan, Australia, South Korea and the USA will see more Chinese arrivals,” Aaron Fischer and Marcus Liu note.