China Tourist, GBA

Crossing the water

New bridge brings a million people to Macau in first two months


The fast lane to Macau’s casinos

Resentment at the smoking ban in Macau’s casinos smoulders on, it seems. We first wrote about the restrictions four years ago (see WiC260) but they clearly still rankle: last month a police officer even had to fire a warning shot during a clash with a man over putting out his cigarette.

Until the end of last year the VIP rooms were the only places left where lighting up was still allowed. HSBC estimates that 59% of VIP revenues are derived from ‘smoking’ tables and analysts had warned that new curbs on smoking from January would slow down play as gamblers went outside for a gasper.

Sure enough, January saw the first year-on-year fall in gross gaming revenues since the summer of 2016, although there was lower spending in the lead-up to the Chinese New Year this week too (the holiday fell later in February last year, complicating the like-for-like comparisons).

The medium-term metrics have been more positive for Macau, which welcomed 35.8 million tourists last year, an increase of almost a tenth. Visitor numbers actually set new records in December, buoyed by the opening of the Hong Kong-Zhuhai-Macau bridge, which brought more than a million people to the casino enclave in the first two months of its operations.

The 55-kilometre bridge-and-tunnel link is the most striking symbol of the new roads and railways bringing the Greater Bay Area (GBA) together. But the world’s longest sea crossing is stirring rather different reactions on the opposite banks of the Pearl River.

In parts of Hong Kong it is getting some of the blame for a tourist invasion and there are growing calls for the numbers of arrivals to be capped: 51 million mainlanders came to the city last year, a rise of almost 15%, with single-day visitors rising by more than a fifth.

Tensions about the bridge in particular first spiked in Tung Chung – the town closest to the link’s arrival point in Hong Kong – with protests about the numbers of day-trippers from across the border. Unrest has also flared in other districts of the city and there were more demonstrations in Tuen Mun last weekend at the busloads of shoppers crossing the border at Shenzhen Bay.

Over to Macau, the local tourism bosses have high hopes that the bridge will bring a bigger boom, especially from people arriving from Hong Kong’s airport, which can now be reached twice as fast thanks to the bridge.

Macau’s airport is building a new terminal but Hong Kong’s much larger hub handles nine times as many passengers, with direct flights from more places in China. That makes it a plus-point for Macau’s efforts to rely less on visitors from neighbouring Guangdong. There are hopes that the new arrivals will speed up its transition to the mass-market model too.

Gaming revenue from VIP tables last year was $20.7 billion, or still about 55% of the total. But more mass-market gamblers should be better for the casinos over the longer term because margins are much better (in the high-roller rooms, some of the take is handed over to the junkets which facilitate getting the funds outside mainland China). Tourism bosses also want to tempt visitors to spend more on food, lodging and entertainment – and not just lose their shirts on a few hours of high-stakes baccarat – and the central government favours the trend too, because Beijing sees the VIP sector as a conduit for capital flight and money laundering.

The change in mood has prompted more of the casinos to plan for a time in which high-stakes gamblers are less of a priority, including Melco, one of the leading operators, which says it will rip out all the VIP tables at one of its resorts in Macau by this time next year.

This year’s holiday will already be hectic, with the new bridge expected to bolster a 9% increase in visitors. Most of the city’s 23 five-star resorts were fully booked for at least four days during the holiday, the local media said, despite nightly rates of $300 or more, well above the usual average.

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