Macau has been the most successful land-based casino hub for some years now. In fact, Macau has been so successful that other global casino destinations have attempted to replicate its success. Therefore, it is bizarre to learn that Macau is actually planning to try and decrease its annual tourist visitors. Never before have we heard of such a bizarre situation in international tourism.
Based on 2014 visitor figures, we can confirm that Macau posted record tourism numbers of approximately 31.5 million. Of those visitors, two thirds were from Mainland China, where there is nowhere to play legally in casinos. And with a 5% increase forecast for 2015, Macau is clearly still a success.
Overcrowding Concerns for Macau
In attempting to explain Macau’s desire to decrease its visitor numbers, Alexi Tam Chon Weng, who acts as the Secretary for Social Affairs and Culture, shared a number of concerns. Namely, he is concerned that Macau becomes ‘so crowded that people cannot even get on a bus or cannot find a restaurant for a meal’. He believes that such overcrowding would actually harm the long-term appeal of Macau.
Macau is considering a number of measures to limit tourist visitors. Most prominently, though, the special administrative region will hand out fewer visas permitting entry. That would be simplest and most effective way of limiting visitor numbers. However, analysts are concerned that restrictive action from Macau would be damaging for a market where casino revenue is actually declining.
Macau Casino Revenues Decline in 2014
Bizarrely for Macau, visitor numbers are increasing while revenues are actually declining. In 2014, revenue fell by 2.6% to be worth approximately £28.54 billion. Looking further into the problem, there was spell last year when casino revenue declined for seven months in a row.
In attempting to pinpoint the problem, it is worth looking at the 39% decline in VIP gaming revenue at MGM’s Macau casino. That loss helped contribute to a 22% decrease in revenue for MGM in quarter four of 2015. Waning interest for VIPs is a logical explanation for the revenue decreases.
The Importance of Casino VIPs
Exclusivity is one of the most important factors in elite holiday experiences. Quite simply, wealthy VIPs do not want to be in close proximity to be people much further below them on the economic scale. By implementing legislation to limit visitors, Macau would effectively be attempting to increase its exclusivity.
Based on the above revenue statistics, Macau politicians have likely identified overcrowding as a turn-off for VIPs. And it is difficult to argue with that assessment, as visitor figures are increasing while revenues are going down. Essentially, that indicates Macau is becoming more of an affordable casino location akin to Las Vegas and Atlantic City.
Should it come to limiting visitors, Macau is likely to provide fewer visas to visitors to Mainland China. At present, approximately 70% of visitors to Macau come from there. Restoring VIP revenue will be key to Macau maintaining its position as a global gambling hotspot.
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