Macau Business | May 2021
According to the usual schedule, the Gross Domestic Product estimate for the first quarter will be available by the end of May. Until then, we have to look into other indicators to gauge how fast and sustainably the economy is picking up. As we may remember, January 2020 was the last ‘normal’ month before the economy essentially closed down after the Chinese New Year celebration. As things start to recover, it is only natural and expectable that the results for the same months this year are noticeably better than those recorded last year.
It is arithmetically inevitable that after a virtual standstill in February and March 2020, any improvement will be, in relative terms, significant. Not surprisingly, the press notes accompanying the release of the latest statistics on tourism-related indicators are full of extraordinary growth rates. They are almost literally peppered with two- and three-digit percentage increases. The latest note on the arrival of visitors possibly beats them all, pointing out that the March (strikingly precise) growth rate for visitors from mainland China on individual visas reached, quote, “3.8381%”.
At any other time, that would undoubtedly be a fantastic number. Under the circumstances, it is possibly best only to take note that such an essential tool for the reestablishment of sustained mainland visitor flows – the individual visas – is ‘alive’ again. And leave aside the figures that, impressive as they may look, carry little meaning in the end. As it were, when we move from zero to one, acceleration is almost infinite.
That does not mean the improvements we see compared to last year should be disregarded. They are noticeable, welcome, and worth underlining. But more than taking note of them, we need to use them to continually assess what can be done to get back to the sort of normalcy that has eluded us for so long. Lest we forget, in February and March last year the figures for the number of monthly visitors dropped from a monthly average above three million to levels around or below 200,000.
The figures for the first quarter this year show we are moving up again but are still far from what used to be the norm. In the first quarter of 2019, the number of visitors exceeded ten million. This year, according to the latest figures, they stood just above 1.7 million. That is, roughly one-sixth of what they were before.
Visitor flows are critical for all businesses linked in some way to tourism – and few may be exempted. Gambling may prosper with fewer visitors. Its income depends less on the absolute number of visitors than on their gambling profiles. Revenues there are also improving. Yet they stood in the first quarter at about one-third the pre-crisis level.
Actual visitors play a more significant and especially vital role for most businesses that need real people sleeping in their beds, eating at their tables, buying goods at their shops. They, nothing else, will provide for their sustainable livelihood.
We should not be carried away by percentages alone. Anyway, they are bound to decrease for purely arithmetic reasons as growth picks up and consolidates. Available data shows improvements indeed, but it would be disastrous if that were not the case now. If they are good enough or could be better still, it is a matter of judgment and speculation beyond the point we are getting here. Indeed, it is an exercise that needs to be done but is possibly better accomplished if we start with a sober look at the figures and the tools we can marshal to spur a sustained recovery.