SMEs unaffected by dropping gaming revenues, vice-head of SME association says

The slowdown of the gaming industry and its plunging gross gaming revenue (GGR) may only affect the high-end retail stores in the city, while local SMEs are unlikely to be affected, says Daniel Iong, vice-president of the Macau Small and Medium Enterprises Association.
“The dropping gaming revenue is mainly due to the anti-graft polices [of the Chinese Government] as well as the visa and UnionPay restrictions which drove high-rollers away from Macau. Thus, this may affect high-end retailers, such as jewellery stores. Nevertheless, the declining GGR is not creating problems for SMEs”, Mr. Iong told Business Daily in a phone interview yesterday.
The city’s GGR slumped in December 2014 by 30.4 per cent year-on-year, leading the city to have seen its very first annual negative growth in this revenue.
“Dropping GGR does not mean that society would ]likewise] sag… For example, the F&B industry [and] following the increase in the number of tourists I don’t see they are facing any problems”, he maintained.
In fact, the vice-president says that human resources are a more difficult issue for SMEs, in addition to rent.
“There are two [casino] projects to be opened this year…how to distribute [evenly] the human resources at an unemployment [rate] of 1.7 per cent will be [an issue] as it will be more difficult for SMEs to hire workers”, Mr. Iong perceives, revealing that many SMEs in the city are increasing the salary of their workers by between 4 and 6 per cent in 2015.
“They [SMEs] are more likely being forced to raise salaries just to keep manpower”, he said, claiming that some SMEs may give pay rises of 10 per cent to workers performing well.
Asked by Business Daily whether the SMEs can actually afford such salary hikes, Mr. Iong said, “They have to do so even though they may not be able to afford the hike. Even if they cannot they would rather cut expenses on other items”.
Despite local SMEs likely being affected by manpower scarcity rather than the plummeting GGR, it was reported by Chinese-language newspaper Macao Daily earlier the week that the city’s souvenir retailers did suffer in the second half of 2014 as GGR started to drop.
The newspaper quoted an unidentified retailer saying that the souvenir retail industry has seen the best performance during the first half of 2014 in the past five years. However, the source indicated that the performance of the industry had started turning south in the second half of 2014. In particular, the industry had seen a ‘rare decrease’ in its sales year-on-year during the last quarter of 2014, following the number of ‘high-spending’ customers falling off.
In addition, the Chinese newspaper reported another source from the MICE industry who perceived that the adjustment in the gaming industry had presented opportunities for MICE. The newspaper quoted the source saying that the gaming corporations may seek more co-operation with the MICE industry, as they are required by the government to develop more non-gaming elements.