Inside Asian Gaming

inside asian gaming April 2015 7 In Focus Macau’s number two and three visitor sources. Until direct flights between Taiwan and mainland China resumed in 2008, Macau (like Hong Kong) had a niche as a stopover for cross-strait travelers. Since then, Macau’s arrivals from Taiwan have fallen by 490,000 or 34%. Macau’s arrivals from Hong Kong have decreased 1.8 million from their 2007 peak. As Macau’s tourism and gaming capacity grew, focusing on mainland China made sense. China is right next door, has 1.3 billion people, no legal casinos, and for two decades has been the world’s fastest-growing major economy. By percentages and sheer scale, China’s economic expansion has been much greater than other regional economies, The Platinum Ltd Managing Director Mary Mendoza notes, making the Chinese market by far the most tempting target for Macau operators. Moreover, Macau has strong cultural and social ties to the mainland. About half ofMacau’s populationwas born in themainland, and local community leadership turned toward China during the city’s final, indifferent decades of Portugal’s colonial administration. “I’m surprised they’ve done as well as they have” attracting visitors from beyond the mainland, Spectrum Asia chief executive Paul Bromberg says. “They’re completely focused on China.” BIG SPENDERS Targeting China, Macau’s gaming revenue ballooned to $45.1 billion in 2013, nearly seven times the figure for the Las Vegas Strip. In addition to providing proportionately greater gaming revenue than their arrival numbers, mainland visitors are also the biggest non-gaming spenders, although the gap narrowed last year. Mainland visitors’ per capita non-gaming expenditures declined 8.2% to MOP2,354 ($294) in 2014, ahead of visitors from Singapore at MOP1,904 and Japan at MOP1,846. Despite the decline, mainland visitors accounted for 70% of total visitor non-gaming spending. Mainlanders have fueled Macau’s shopping boom; even with last year’s pullback, their MOP1,078 per capita shopping spending doubled that of any other THE RISE AND FALL OF NON-CHINESE TOURISTS TO MACAU | Arrivals by Source Market From 2003 to 2014 Year Total Visitors Mainland China Mainland China Hong Kong Taiwan Greater China Non-Greater Non-Greater China Visitors Visitors % of Total Visitors Visitors Visitors % of Total China Visitors Visitors % of Total 2003 11,887,876 5,742,036 48.3% 4,623,162 1,022,830 95.8% 499,848 4.2% 2004 16,672,556 9,529,739 57.2% 5,051,059 1,286,949 95.2% 804,809 4.8% 2005 18,711,187 10,855,496 58.0% 5,614,892 1,482,483 95.9% 758,316 4.1% 2006 21,998,122 11,985,617 54.5% 6,940,656 1,437,824 92.6% 1,634,025 7.4% 2007 26,992,995 14,866,391 55.1% 8,174,064 1,444,082 90.7% 2,508,458 9.3% 2008 22,993,185 11,613,171 50.5% 7,016,479 1,315,865 86.7% 3,047,670 13.3% 2009 21,752,751 10,989,533 50.5% 6,727,822 1,292,551 87.4% 2,742,845 12.6% 2010 24,965,411 13,229,058 53.0% 7,466,139 1,292,734 88.1% 2,977,480 11.9% 2011 28,002,279 16,162,747 57.7% 7,582,923 1,215,162 89.1% 3,041,447 10.9% 2012 28,082,292 16,902,499 60.2% 7,081,153 1,072,052 89.2% 3,026,588 10.8% 2013 29,324,822 18,632,207 63.5% 6,766,044 1,001,189 90.0% 2,925,382 10.0% 2014 31,525,632 21,252,410 67.4% 6,426,608 953,753 90.8% 2,892,861 9.2% Source: Macau Statistics and Census Service Economic diversification has proven elusive in view of Macau’s gaming-centric tourist mix; customers want what they want. Another potential area of diversification, greater variety in Macau’s visitor pool, has been largely unexplored, an outcome of what’s been sound financial judgment, if poor risk management. group. Collectively, mainland visitors accounted for 33.8% of Macau’s total retail spending last year. “They’vebeensosuccessful with theChinesemarket that theyhaven’t thought of expanding their horizons,” a regional gaming executive with extensive Macau experience who requested anonymity says.