December this year will be mark the occasion of Macau’s return to China, 20 years ago. Approaching this milestone many residents will be taking stock of all the developments that have occurred, and asking how Macau scores when it comes to the quality of life both living and working here.
Undoubtedly there have been enormous physical changes that have unfolded over the years, with expansive reclamation projects, the building of world class hotel and casino facilities to be proud of and shiny new multi-tower residential developments popping up it seems on any spare plot of land possible. Jobs are plentiful for the locals – perhaps not always the jobs they want, but no one will go hungry. Casino tax revenue money pours into the government coffers. Roads are kept clean and well maintained. Well stocked supermarkets on most street corner – fresh fruit, vegetables and meat at still affordable prices.
So life is good, right?
With now over 32 million tourists that visit Macau each year, the question begs what is the impact of this on our lives? Given the current infrastructure we have, are we starting to see ‘over tourism’? How do the locals feel, are they fed up with being over-run with tourists and how much more will be tolerated? During the recent Chinese New Year, central Macau was as usual mobbed. We should heed the warning that like the ancient Chinese city of Li Jian which is being destroyed by tourism, this will likely happen to us. Despite the gallant efforts of the road-side police, pavements were at bursting point, and residents find themselves having to do, what’s become known in ballroom dancing terms as the ‘Senado Shuffle’!
And in the casinos – take the Venetian for example. If you want to shop in their retail malls it’s simply an intolerable experience fighting with the crowds – a great majority of them it should be noted are in groups of 20 or 30 following a tour guide flag, gawping at the gondolas, with no intention to spend a single cent there. There’s no revenue benefit for the shops, it’s a lousy experience for the tourist, and as a local one simply gives up and goes home. There’s a term for this: it’s called the ‘Displacement Effect’, when local residents avoid areas where they live simply because they are too crowded.
Associate Professor of International Integrated Resort Management at the University of Macau Glenn McCartney spoke at a Chamber of Commerce breakfast meeting recently and argued that increased numbers of tourists doesn’t necessarily translate into increased spending. “Our focus should be on tourism management, not tourism generating. We should be creating a better experience for our tourists”.
McCartney showed his audience a social media video clip of top holiday experiences of young Chinese travellers. Action packed, sporting, scenic beauty. He then compared this with some of Macau’s annual calendar of events. What are these events, like the International Fireworks Display contest or the A Ma Cultural & Tourism festival as two examples, actually doing for Macau – are they positively impacting Macau? “Given these are a major year-round rollout by tourism, culture, arts, sports departments (and more often with the word ‘International’) – how do they impact Macau’s perceived image? Are they creating appeal in new markets? Creating loyalty? Translating into longer stays/larger spend?” What Key Performance Indicator (KPI) measurements are carried out, as, he explains, is done in Singapore where they take effectiveness evaluation very seriously?
McCartney went on to stress that the competition is intensifying. “Our 20 years of first mover competitive advantage (and cross border advantage to China) is eroding.” Of the 120 million Chinese overseas travellers each year, more and more are choosing NOT to go to Macau preferring instead other regional and international destinations. Statistics show that in the last 5 years, numbers of Chinese visiting Europe have doubled. And, it seems, Chinese spend 20 times more there. “Japan is a very real threat. They had 31M visitors in 2018, almost the same number that we get coming to Macau.” Nearly 25%, 7.5 million, were from China and they’re not going for gambling as there are no casinos – yet. Government approval for these was given as recently as July last year. 50% of Japan’s tourism mix is Korea, Taiwan & Hong Kong.
By comparison Macau is as far from achieving true diversification of its tourism industry as ever. “We have in fact become more reliant on gaming revenues and more reliant on a single market, being China which up 90% of Macau’s visitors and within that single market Guangzhou comprises 45% of our visitation, so we haven’t even diversified within China,”
Lack of branding strategy is one of the reasons preventing true tourism diversification and why Chinese travellers are starting to look beyond Macau. “There’s no common message – there are 2 polar positions”; the CoTai operators are promoting ‘gaming’ and aiming for the VIP and Premium Mass target with the biggest spend. The tourism department promotes ‘heritage’, the government is pushing a more mass-market focused tourist mix which by its very nature is lower spending.
“So nothing much has changed in Macau. What is our legacy planning, what do we want to leave for our children?” McCartney asks. We need to understand the new Chinese traveller. In order to stand out from our competitors we need more innovative communication. He suggests that the only way for Macau to truly become diversified is for the Macao Government Tourism Office (MGTO) to sit down with operators and to devise a collaborative pathway forward.
