By Mary Mendoza*
Managing director of The Platinum Limited, a gaming-hospitality consulting firm
It is important to anticipate the future; one shouldn’t postpone taking action if it can strengthen the economy and every person’s wellbeing. An economically strong city is politically strong which entails a realization of keeping Macau citizens moderately prosperous and socially stable.
How does it relate to Macau’s commitment to driving international market? Citing the Macau Government, the positioning of Macau is “World Center for Tourism & Leisure”, and the region needs to diversify its offerings. Yet the international market visitation from the past 20 years averages 8 per cent, while during the pandemic we have had zero international leisure visitation. Macau’s gaming tax & levies of 39 per cent are some of the highest in the world, making the enclave’s economy reliant on the casino industry with contributions of 70-80 percent of the government’s revenue.
This is expected to change. It is noteworthy that the cash-rich gaming industry is on the stage of the tender process and accepting bids for 48 days through September 14, as outlined in Executive Order 136/2022 of the Macau government’s Official Gazette. This is one of the key elements to driving a future attracting international market. The “concession contract for the operation of casino integrated resort tender document” stipulated that one of the evaluation criteria of bids requires the company’s proposal to develop tourist markets from foreign countries.
The new or renewed concessions are expected to be in place from January 1, 2023. Thus, the incentive of a maximum of 5 percent tax reduction could be given if the operators bring foreign visitors/players.
The question remains as to how feasible it is to begin driving foreign visits to Macau SAR when COVID-19 pandemic restrictions prohibit foreign tourist visitation and international flights are kept at a minimum level. In addition, as the outcome of the public tender is anticipated to take place in the fourth quarter, this raises a question on implementation, monitoring and tracking of foreign players. While answers to these questions are still unknown, one can start formulating what can be done to drive foreign visitation.
Information is a beacon; the hypothesis of data is crucial in determining the target market coming to Macau. There are a few important factors to consider in driving visitation from foreign markets. Here are five strategies that are critical to driving international visitation that grow tourism and act as a channel for tax reduction for concessionaires, and economic growth for Macau.
Five Strategies to Drive Foreign Visitation
- Visa Application (e-visa or visa waiver program)
- Accessibility of flights (proximity to destination)
- Propensity to play or spend
- Travel Bubble (quarantine free)
- Marketing & PR Strategies
By identifying those factors that are critical to the success of driving visitations, one can think about how these can be applied to complex strategies, and intertwined with government policy.
While only the People’s Republic of China, Macau SAR, Chinese Taipei, and Japan are the only remaining destinations with zero international or partial international inbound travel, the rest of Asia has already restarted opening their borders. What it means for Macau is the opportunity to rethink tourism policy, marketing strategies, and execution. This is an extraordinary occasion to find a new way forward, to establish a robust international market as opposed to reliance on a single source market (mainland China). As shown in figure 2 below, these lists of destinations in Asia alone have already opened up, and the vaccination rate of their country is one of the major considerations when a jurisdiction decides to open up.
These destinations within Asia-Pacific that have already opened, reported that the domestic market continues to lead the recovery and accelerated pent-up demand. While international travel is expected to recover, short-haul travel is expected to gain the fastest recovery followed by intra-regional travel. Some destinations still have restrictions imposed, such as wearing a mask and vaccination requirements. This is a critical point for the tourism sector, as countries learn the lessons of the pandemic while looking forward to a robust future.
Some principles are important for concessionaires, private sector, and government as Macau finds itself gradually reopening locally, and while being at the forefront of rebuilding first the travel bubble with neighbouring mainland China and eventually, sometime in the future, the international market.
The two leading theories for the current situation in Macau to build foreign markets are:
First, there are plenty of questions without any answer, and, second, it is imperative to do what it can with the resources available while anticipating the future; one shouldn’t postpone taking action if it can be done today.
*Mary Mendoza is managing director of The Platinum Limited, a boutique consulting firm with a focus on tourism, gaming, and hospitality. Platinum is affiliated with the C3 Gaming Group (Las Vegas). Mary has over 20 years of working experience which she served within the hospitality, gaming, and tourism industries. She is an IR executive, thought leader, advisor, consultant, and speaker. In a philanthropic capacity, Mary is serving as an ASEAN Advisor for a non-profit organization The Cambodian Community Dream (The CDDO). She is serving as Head of the GBA Tourism & Leisure Committee of FMCC.