Amid the latest setback in tourism and economic activities caused by the pandemic, local businesses look for ways to stay afloat and co-live with Covid-19
Empty streets, deserted tourist sites, closed shops, event cancellations… These are supposed to be distant memories for many in Macau, as economic activities have gradually recovered in view of the stable Covid-19 situation in the territory since the middle of last year. But the recent hiccup demonstrates the local business performance is still very much at the mercy of the pandemic: some now look forward to a quick resumption of recovery again, some find ways to live with this unprecedented public health crisis and some bemoan for more government support.
Following no local Covid-19 case for almost 500 days, except a few imported cases, the city unexpectedly confirmed four cases of the more transmissible Delta variant on 3 August — a family of four, with the daughter expected to be the source of their infection, who had been on the same flight in Mainland China with confirmed cases. This had promptly sparked fears of an outbreak in the local community, and thus, the government had temporarily imposed a status of “immediate prevention” across the territory, leading to a mass testing drive for the entire population and further temporal restrictions at the border checkpoints whereby any people crossing between Macau and nearby Guangdong province had to present a negative nucleic acid result undertaken within the last 12 hours.
Though it has proven to be a false alarm — no more new cases have been reported and the government has lifted the “immediate prevention” status a week later — the implications for local businesses, particularly small-and medium-sized enterprises (SMEs), have been profound. “The performance for most businesses [in tourist areas] have still not recovered to the pre-pandemic volume after more than a year and half,” says Lei Cheok Kuan, chairperson of the Industry and Commerce Federation of Macau Central and Southern District that covers the shops and merchants in the downtown area of Macau Peninsula.
“We originally expected the business sentiment would continue to get better over the summer after considerable improvements in May with the turnover recovering to 50-80 per cent of the pre-pandemic volume, but the Covid-19 fluctuations in nearby Guangdong in June and the new cases here [in August] have dashed our hopes,” he says. The monthly tally of travellers to the city hit the highest level in May at over 866,000, or nearly 28,000 travellers a day, since the start of the pandemic in early 2020, but the upward momentum has not been sustained in recent months, official figures suggested.
“We have particularly been hit hard by the new cases in August with a decrease of 80-90 per cent in turnover, as there are no travellers. The situation for the past weeks has been so dismal, alike the start of the outbreak in early 2020,” Mr Lei pinpoints. “We now could only hope the tally of travellers could rebound again after the travel restrictions have been loosened.”
Empty streets and closed shops
As the city has not seen any new cases since 3 August, the authorities have eased the travel rules between Macau and Guangdong starting from 25 August, in which people only need to present a negative nucleic acid result issued within the past seven days to cross the border. It remains to be seen how quickly the local tourism market could recuperate from as low as 2,000 travellers a day once recorded in early August, but the Macau Government Tourism Office (MGTO) has addressed in recent times it hopes the the number of visitor arrivals could reach over 25,000 travellers per day during the Chinese National Day holiday — one of the major holiday seasons for the mainland, the only place at the moment the city has quarantine-free travel arrangements with — in October.
Macau Business paid visits to the tourist districts near Senado Square and Ruins of St. Paul’s on the Macau Peninsula and the area of Rua do Cunha in Taipa in two weekend afternoons in August before the easing of travel rules, and only a handful of people were seen at the once crowded landmarks of the territory. A rough count at the scene also showed at least one-third of the shops at Rua de São Paulo and Rua do Cunha — the popular destinations for visitors to shop for Macau food souvenirs — were closed, while there were more staff than customers for most of the remaining stores and eateries along the streets.
“There were even fewer people — almost no people — and fewer shops opened in the beginning [of August],” said Ms Lei, who has run a food souvenir shop at Rua de São Paulo for about a decade. Her shop sold almond cookies as low as MOP10 (US$1.25) a box, which were able to fetch as much as MOP50-60 a box in the golden days of local tourism — some other souvenir shops in the same area also offered discounts as steep as hers.
“We have manufactured a considerable amount of food products before this new wave [of cases]. If we hadn’t opened for business, these all would have gone to rubbish bins,” she said, pointing to the rows of stocks still left in the shop. But her operation recorded as low as MOP30 a day in turnover amid the lack of tourists in this time period. “The business has just been slightly better, between some MOP100 and MOP300 [a day], in the past few days, but it is still not enough to even pay the wages of the staff,” she said in late August. “We could only hope the visitors could come back soon; otherwise, you won’t see us here next time.”
The President of the Industry and Commerce Association of Macau Northern District, Wong Kin Chong, highlights the lack of travellers at the moment is not the only problem. “Residents have also been more conservative in spending in recent times as they don’t know whether there will be more fluctuations [of the pandemic] and whether the government will roll out a new round of subsidies and financial support [for the general public and local businesses],” he adds. The authorities unveiled a new round of e-voucher scheme, granting MOP8,000 per resident, in June, in addition to two rounds of MOP8,000 vouchers in total for each resident last year.
Awaiting the return of mainland travellers, Mr Wong believes the authorities should also engage with the nearby Hong Kong administration for the gradual resumption of travel between the two SARs. “This could bring new customers for local businesses,” he adds. As Hong Kong is the second largest feeder market to Macau behind the mainland, there have been talks of lifting some restrictions between the two SARs — namely easing the 14-day quarantine requirement for those fully vaccinated — in June, but there has been lack of progress since then.
Local businesses have also strived to adjust their operation in tandem with the changes brought by the pandemic. While local restaurants and eateries relied on dine-in guests in the past, Mr Wong points out many of them now have gradually shifted to the segment of take-aways during the pandemic period as diners avoid crowded places.
More government support
Unlike the start of the pandemic in early 2020, when all casinos were mandated to shut down for 15 days, and over a month for other entertainment and leisure venues, the administration had only temporarily shut down entertainment venues, such as gyms, cinemas, bars, nightclubs, karaoke lounges, massage parlours and beauty salons, for two weeks in August to control the spread of coronavirus disease. Casinos have remained open this time.
The Macau Beauty Industry Business Association, representing some of the over 800 beauty salons in the territory, has recently held a press conference venting about their predicament. The latest up-and-down of the pandemic situation and temporary shutdown have “greatly dampened” the industry, whose business volume has just recovered to 60-70 per cent of the pre-pandemic level, said Colour Cheng Lai Ngan, chairperson of the group.
At least six beauty salons have been dissolved since last year and “30-40” more salons might also have their operation terminated in the near future, she said. The government should roll out one-off financial assistance again to help specific sectors that have been embroiled in the latest turmoil like the beauty industry, she added.
The Macau Entertainment and Service Association, which represents local SMEs that run massage and sauna parlours, karaoke bars and nightclubs, also advocates that more help from the administration is needed. “Our business has been grim for the past year and more with little to no patrons from Hong Kong and Mainland China due to the travel restrictions. The number of local guests has also slumped with the gloomy economic prospect,” says Wu Kin Wai, president of the group, adding “many” local massage parlours and karaoke lounges have closed down in recent years as customers opt for entertainment offerings in gaming resorts or in adjoining Mainland Chinese cities.
“The temporary mandatory closure in recent times has just put more pressure on our businesses and some of us might go out soon,” he says. While the authorities have advanced different types of support for local SMEs in these two years — including a one-off financial subsidy last year, streamlined procedures for government loans, and tax breaks like a waiver of 5 per cent tourism tax levied on tourism-related operators — he emphasises: “The measures rolled out by the government so far have been helpful but there should be more. The authorities should actively consult with different industry players to formulate support tailored for specific sectors soon.”
In a written reply to legislators’ enquiries about what additional support is in place for local businesses in August, Chief Executive Ho Iat Seng wrote the authorities have already granted MOP8.2 billion for SMEs through various loan schemes from last year until end-July 2021. “The SAR Government will stay tuned with the latest pandemic situation and the local economic development, and pragmatically organise various tasks to keep the pandemic under control and revive the local economy,” the reply said. “[The Government] will also put forward more support [for local businesses] if needed.”
Live with Covid
The recent new cases in Macau have also dealt another blow to the local MICE (meetings, incentives, conferencing, exhibitions) segment, which has already faced delays and cancellations throughout the past two years over travel restrictions. Latest official data show there were only 68 MICE events in the first quarter of 2021, down by 44.3 per cent year-on-year and nearly 82 per cent from the same period two years earlier, following a 76.4 per cent plunge in the number of events last year.
“Many events have been cancelled or postponed in tandem with the anti-epidemic measures by the government,” says Alan Ho Hoi Meng, chairman of the Macau Association of Convention, Exhibition and Tourism Sectors. “The recent fluctuations here and in some mainland cities have definitely caused disruptions again to our operation and plans.”
In view of the four new cases in August, all the physical activities of the 2021 Macao International Environmental Co-operation Forum & Exhibition, scheduled between 5 and 7 August, were cancelled, as the event was only held online. The inaugural edition of the BEYOND International Science and Technology Innovation Expo was also postponed from 26-28 August to 2-4 December.
“It’s fortunate the situation [here] has been quickly under control that there are conditions for the events scheduled for the remainder of the year to be continually held,” Mr Ho says. “But there are still a lot of uncertainties as the mainland still stays highly vigilant against any surge of Covid-19 cases.”
“What we have learnt in this pandemic is to find ways to live with [the coronavirus] — we have been actively exploring the online format of MICE events,” he continues. “Macau is still in the beginning stage with more online meetings than online conventions.”