Loosened transit visa new dawn for economy?

The city’s relaxed transit visa restrictions for Mainland Chinese may herald a new dawn for the recovery of local tourism, hotel and gaming industries, Credit Suisse and local travel associations predict.
On Tuesday, the Public Security Police Force (PSP) announced that the maximum permissible stay of Mainland tourists entering the territory for the purpose of onward travel will be increased to seven days from five, effective from July 1. In addition, it will allow Mainlanders transiting the city twice within 30 days to stay two days the second time they enter.
The President of the Macau Travel Industry Council, Andy Wu Keng Koung, told Business Daily that the policy will help local hotels to a higher hotel occupancy rate.
“The relaxation, for sure, is helpful to the tourism industry, especially the hotels, which have experienced drops in occupancy for half a year. The extension of the permissible stay by two days may increase the chances of tourists spending one more night in Macau; as such, the hotel occupancy rate will be boosted,” Mr. Wu said in a phone interview yesterday.
The ‘new’ visa restriction for the Mainland Chinese, in fact, is the ‘old’ practice that the government applied before July 1 last year. The tightened changes on visa restriction is believed to be one of the factors that drove the city’s gaming industry south.
Asked how he anticipated that the policy would stimulate tourist numbers to the city the travel association head claimed that the policy would be interpreted by tourists as a positive psychological message.
“When the government tightened the restrictions last year, many of the Chinese tourists were not comfortable with it. In addition to regulating the permissible stay period, the government had also required documented proof showing that tourists were indeed heading to a third destination, which made many transit tourists choose Hong Kong,” he said.
Positive signal
Mainland tourists are the biggest source of visitors to the Special Administrative Region. In the first five months of the year, the city registered total visitor arrivals of 12.5 million, of which 66.8 per cent, or 8.35 million, were from Mainland China, according to the latest official data of the Statistics and Census Service.
Credit Suisse also believes that the new rule will help prolong the stay of Chinese tourists, and increase the frequency of their visits, thus suggesting a sign of recovery for the local gaming industry.
‘We view the visa loosening as a positive signal by the government, and expect the Macau names to trade positively on the back of this. We believe a recovery, if any, is likely to be gradual as Macau gross gaming revenues was hurt by both demand (weak macro) and supply (visa and fear factor of anti-corruption),’ Credit Suisse wrote in its latest research report.
‘The VIP and premium mass segments have been hurt by the transit visa restriction since July 2014 which reduced players’ visit frequency and length of stay,’ the firm added, stressing that the [new] policy will be ‘a positive signal’ from the Macau Government to support the industry.
However, the firm noted that the recovery of gaming revenues will still take time even with visas loosened.
Nevertheless, the city’s Secretary for Security, Wong Sio Chak, claimed yesterday that the decision to loosen the transit visa restriction is due to the violations of such regulations having improved following the tightening last year, indicating that the government might evaluate adjusting visa restrictions at any time if the number of regulatory violations increases again.