A cold summer

Despite the recent relaxation of cross-border travel measures, the tourism sector doesn’t expect any huge changes in the market, at least for the summer, as it will be basically relying on residents and a few travellers. 

The recent easing of quarantine arrangements for travel between Macau and Guangdong has gotten rounds of applause in the city — but the cheers are short-lived. In fact, travellers are yet to return to the city, which eagerly awaits them; and this may only happen after the summer at the earliest. 

On July 15, Guangdong authorities removed a rule according to which people returning to the province via Zhuhai from Macau were required to quarantine for 14 days. The free movement of people between Macau and Mainland China has been heavily affected by the global COVID-19 pandemic since it first broke out earlier this year, and this latest arrangement is regarded as the first step towards the restoration of the normal transit conditions. 

The Macau government has forecast that the daily visitation to the city could amount to an average of 2,000 people shortly after the relaxation on the traveling restrictions previously implemented. The figure pales in comparison to the pre-pandemic level, as the city received over 107,960 travellers a day last year, but it will still mark a slightly improvement from the recent weeks, since the daily visitation figure for the month of June only averaged above 750. 

“We don’t expect this relaxation will make much difference, but slightly — very slightly — help the local tourism”, says the chairman of the Travel Industry Council of Macau, Andy Wu Keng Kuong. The rationale behind his thought is the lack of mainlanders with valid visas coming to the city, as the Central Government stopped issuing new permits for mainlanders wishing to visit Macau through the Individual Visit Scheme (IVS) in late January due to the virus outbreak, and banned package tours to the SAR. This means that mainlanders could only come to the territory provided they obtained a visa before the pandemic, which, however, usually lasts for three months and up to a year at most. 

After the summer 

“This arrangement also only targets the movement of people between Macau and Guangdong. Concerning the mainlanders beyond Guangdong with valid visas, there are still many hurdles for them to visit Macau”, Mr. Wu continues. For instance, any people who now return to the nearby province from Macau could only stay within the nine cities of the Guangdong-Hong Kong-Macau Greater Bay Area, except Macau residents and mainlanders who work or live in Guangdong, who are allowed to move within the province upon their return. “We expect we still have to rely on the domestic market this summer”, Mr. Wu adds. 

The council chairman hopes the Macau administration will discuss the possibility to grant new IVS visas to Macau with the Central  Government as soon as possible. “[The Central Government] could first allow IVS visas in the nine Guangdong cities of the Greater Bay Area, which could then be extended to the entire Guangdong province and other places in the mainland”, he says. “The very best scenario for now is that there could be new visas [for some mainlanders] to Macau again in August… which will help wrap up this year with an overall visitation figure about 10-20 percent of last year.” 

Official figures show Macau  received 39.4 million visitors last year, up by 10.1 percent year-on-year, but the figure plunged by nearly 84 percent year-on-year to just 3.27 million in the first half of 2020. 

Mr. Wu’s cautious tone is not misguided, as the Macau Government has apparently been signalling for months that the city is ready for visitors again. Unveiling his maiden Policy Address as the Chief Executive in April, Ho Iat Seng noted they would apply to Beijing about issuing new visas again “at an appropriate time”, provided that Macau was in a stable situation again. Two months later, when asked about the same topic again on a public occasion, he just noted that the government “has continuously followed up” on the relevant work and hoped the mainland “could support Macau”. 

“The very best scenario for now is that there could be new visas [for some mainlanders] to Macau again in August… which will help wrap up this year with an overall visitation figure about 10-20 percent of last year”, says Andy Wu, chairman of the Travel Industry Council of Macau. 

The Hong Kong factor 

Indeed, Macau has so far only reported 46 COVID-19 cases and just one case in the past 100 days. Some believe the inaction from Beijing on the visa matter might be due to the Hong Kong situation. The nearby special administrative region is currently experiencing the so-called “third wave” of the pandemic, with 800 reported cases in the first 20 days of July, the highest monthly tally so far since the virus outbreak. 

“Beijing usually has the same standards and treatments for the two SARs in regards to major policies”, says a local tourism figure, who prefers to remain anonymous due to the sensitivity of the matter. “So the fluctuations of the COVID-19 situation in Hong Kong, as well as the political climate there, might deter Beijing from restarting the visa policy to the two SARS.” 

The political climate the source refers to is the controversial national security law that was imposed upon the Asian financial centre on 30 June. According to the Central Government, the new law — with the promulgation process having bypassed the Hong Kong legislature — will help ending months of protests and unrest over the now-shelved extradition bill, which Beijing sees as “pro-independent” and “subversive”; whereas according to the opposition in the Hong Kong community, the new law further imperils the “One Country, Two Systems” principle. 

“Another possible reservation Beijing has on the visa policy is about the capital outflow via casinos here, particularly at the time of so many uncertainties clouding the mainland economy amid the recovery from the pandemic”, the same tourism source says. “But these are all speculation; it’s really up to Beijing to decide, and I won’t be surprised if there will only be changes in September and beyond.” 

Cross-province tourism 

Some here are more optimistic, though. The Chinese Ministry of Culture and Tourism announced on 14 July that mainland travel agencies and tourism businesses could resume the offer – which was halted earlier this year – of tourism products relating to cross-province and cross-city travels, under certain conditions. Cross-border tourism has reportedly been resumed in at least seven regions — Shanghai, the provinces of Sichuan, Guizhou, Jiangxi, Shandong, Qinghai, and Hunan — which might signal that the travel policy to Macau will soon change. 

Samuel Tong Kai Chung, president of the Macau Political Economy Research Association, believes the recent relaxation of the restrictions for travel between Macau and Guangdong is the “first step of gradually resuming the IVS scheme” to the city. “With no new development concerning the COVID-19 situation in Macau and the mainland, the resumption of the IVS scheme will be sooner than later”, he adds.  

Emphasising the cross-border tourism will resume “in a gradual process”, the scholar adds: “It’s not clear yet how hard the pandemic has hit the mainland economy, so it remains to be seen whether this will impact the willingness of mainlanders to come to Macau should they be allowed to [do so].” 

China reported a 3.2 percent growth in gross domestic product (GDP) in the second quarter of this year, as it is recovering from the first quarterly contraction (6.8 percent in the January-March period) in decades. But some analysts have cast doubts on this rosy picture, as Chinese official data has long been regarded as being “manipulated”. 

“It’s not clear yet how hard the pandemic has hit the mainland economy, so it remains to be seen whether this will impact the willingness of mainlanders to come to Macau should they be allowed to [do so]”, says scholar Samuel Tong. 

Local support 

Kenny Cheung Kin Chung, secretary general of the Macau Hoteliers and Innkeepers Association, also maintains a confident tone, adding that the lifting of the quarantine requirement between the two sides gives “a huge boost” to the local sector. “I’m optimistic towards the prospect in the remainder of the year, following the gradual resumption of the traffic between Guangdong and Macau, as long as the city stays vigilant in its works against the pandemic.” 

While understanding there will not be a rapid recovery, he highlights the fact that the industry has planned and launched various new hotel products and discounted packages for the summer to attract local residents and get ready to receive travellers again. Figures from the industry show that the occupancy rate in local hotels, namely three-star – five-star hotels, has hovered around 10 percent since February, with a drop of close to a half in the usual room rate.  

Both the industry and the government have been committed in their attempts to stimulate domestic demand, considering the absence of travellers. Authorities launched the “Macau Ready Go! Local Tours” programme in June, providing subsidies to residents to encourage them to join local tours, and hinted that they are mulling over the possibility to subsidise residents to stay in local hotels. 

While the hotel industry is keen to join the local tour programme, Mr. Cheong stresses, “The size of the domestic market is limited, and we overall need to rely on the support of travellers.”