Opinion – People flows

The slowdown registered this year in gambling revenue has sparked some debate about a possible impending crisis. Until August, when compared with the same figure in the previous year, the cumulative revenue of casinos dropped by about 2 per cent. 

It is not a dramatic figure. But in a region that, for some time, came to believe that the sky was the limit, even small oscillations in growth rates may carry with them elements of surprise, if not apprehension. 

It is a fact that after the 2014 shock the recovery has always been slower than many hoped. Growth never reverted to the speed seen beforehand. It is also a fact that last year the level of revenue from gambling had already started to level off. Moreover, if we take into stock the external political and economic framework of Macau’s economy, the slight contraction registered so far was not wholly unpredictable.

On the other hand, such focus on a single variable dims other figures which are also worth pondering. One example is the number of visitors. Again, up to August, their number has increased by no less than 18 percent, compared to the same period last year. This figure suggests some observations.

Remember that, up to mid-2016, the average number of visitors to Macau hovered around 2.5 million per month. Even during the worst part of the casino revenue stumbling, the number kept mostly stable around that figure. 

In the last two years and a half, however, the flow of visitors picked up and has been growing steadily. The twelve-month moving averaged for the current year has stood firmly above three million visitors. The growth rate appears even to be picking up some speed since the middle of last year.  

Not surprisingly, arrivals of mainland tourists, which represent roughly 70 percent of all visitors, drive much of the growth. The number of visitors from the following two main sources of visitors, Hong Kong, and Taiwan are keeping mostly steady, if not rising slightly.

These figures give us some food for thought. They suggest the destination is still and possibly increasingly attractive for some. That fact alone deserved more considerable effort to identify the forces behind the surge in visitors.

Further, they suggest that other economic activities that rely strongly on tourists may be relatively spared the effects of gambling revenue oscillations.  They may exhibit greater resilience to its vagaries than they are often credited. That is diversification of sorts.