Special Report – Hengqin – synergy and competition

If a hotel room in Hengqin can cost half the price of one in Macau, is that an insurmountable challenge?

Macau Business | April 2022 | Special Report | Macau’s branding challenge

The potential for cooperation with Hengqin is huge, but at the same time it represents a challenge for Macau’s tourism.

“We clearly need to adapt for the new reality, not just strengthen our existing image,” believes Desmond Lam, Professor in Integrated Resort and Tourism Management, University of Macau.

“We need to be, somehow, distinctive. The Greater Bay Area offers an opportunity for Macau to rethink its long-term destination image strategy,” Professor Lam tells Macau Business, summarizing the situation: the opportunities are huge, but we have to work on them.

A very specific issue: if more tourists choose to stay in hotels in Hengqin (and Zhuhai in general) instead of staying overnight in Macau, that will not be good for the local economy.

“Hotels in Macau, especially those within the Integrated Resorts, are well recognized in the world as top-quality hotels, and a number of them have received top international hotel awards. Therefore, many of the hotels in Macau already have certain level of attractiveness to tourists,” explains Amy So, Adjunct Associate Professor, Centre of Macau Studies, University of Macau.

“The issue is whether or not our hotels can have reasonable room rates that attract tourists to stay,” she adds.

The study by Professor Matthew Liu and team confirms this: “When Macau and Zhuhai competed with both high-end and mid-level hotels, due to price competitiveness and geographical proximity, coupled with the efficiency of transportation, Zhuhai was found to be more cost-effective.” Macau was more specialized and appealing to international tourists both in language-efficiency and high-end accommodation standards, the Macau-based scholar tells Macau Business. “Therefore, competition existed in the hotel industry but with different marketing segments.”

What can Macau do to get around this problem, as lowering prices in general does not seem to be an option?

“To ensure tourists stay in Macau hotels, gambling may help but will not be the determinant driver for tourism business, either from the governmental standpoint or our research findings” – Matthew Liu

“Hotels in Macau can adjust their package offer and be creative in package offering,” answers Professor Amy So, President, Macau Tourism and Hospitality Association. “They can work with travel agents and provide short trips to Hengqin outdoor sites which are more like excursions for tourists. Just like in Las Vegas, where resorts work with travel agents and provide short trips to the Grand Canyon, Hoover Dam, etc. Tourists still stay in Las Vegas after their trips. Macau can provide similar packages that eventually benefit both Macau and Hengqin and achieve win-win results in the long run.”

“To ensure tourists stay in Macau hotels, gambling may help but will not be the determinant driver for tourism business, either from the governmental standpoint or our research findings,” commented Matthew Liu.

According to Professor Liu, Faculty of Business Administration, University of Macau, diversifying industrial structure and regional collaboration is imperative.

“To attract tourists to stay longer in Macau, diversifying tourism product portfolios is largely expected. Hengqin owns large financial and industrial capabilities and helps overcome the limited capacity of tourist activities and land for the development of outdoor entertainment in Macau,” adds the Adjunct Professor at The Centre for Macau Studies.

“Hengqin is huge compared to Macau and has good theme park and outdoor activity sites that Macau certainly lacks. Macau lies more in the ‘CERT+IR’ direction,” Amy So explains.

She explains that in CERT+IR “C” stands for cultural heritage, “E” for events and festivals that include hosting sport events and different types of festivals, “R” stands for restaurants with the theme of creative city of gastronomy and “T” stands for tourism. “IR” stands for integrated resorts that are gradually shifting the focus towards more non-gaming entertainment and MICE business.

“Therefore, both Macau and Hengqin have their unique features. Tourists who come to Macau can stay in Macau and enjoy the top-quality leisure entertainment and resorts while including a day in Hengqin for adventure-type, outdoor activities,” believes Ms So, who is also Director, Centre for Tourism and Integrated Resort Studies.

And Matthew Liu stresses that the close connection to Hengqin has been emphasized by the Tourism Industry Development Master Plan Project and even by Beijing, implying several core visions, including (1) The Improved Macau + Regional Cooperation Scenario, (2) Macau–Zhuhai Development Core and (3) “Framework Agreement on Cooperation between Guangdong and Macau”, “highlighting a synergistic regional cooperation perspective and resource optimization in the tourism industry. The point is to generate positive synergetic effect, as well as to develop an internationally recognized tourism resort and diversify the industrial structure.”

Sports tourism

The Sports Bureau revealed that, based on the “Tourism Support Plan”, the MGTO will study the integration of sports and tourism items to be held in Hengqin, with the aim of strengthening tourism cooperation between Macau and Hengqin.

In response to a written question from deputy Ho Ion Sang, the Sports Bureau stated that there will be more incentives and support for the organization of the various sporting events in Macau aimed at target groups outlined in the contents of the “Plan of Support for Tourism”.

In May 2021 this Plan was updated with the inclusion of the item “Sports Tourism”.

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