CASINO

Macau gov’t planning to curb tourist visitors; analysts think it’s a bad idea

TAGs: Alexi Tam Chon Weng, Casino Gambling, individual visit scheme, Kirby Garlitos, Macau, Nomura

Macau gov't planning to curb tourist visitors; analysts think it's a bad ideaIf there’s ever such a thing as having too many tourists visiting a given location, then Macau is in for a real problem. Last year, the only place in China where casino gambling is allowed took in a record 31.5 million visitors, two-thirds of which are made up of visitors from the mainland. More importantly, that number is expected to increase by 5% this year.

The combination of the high visitation numbers and Macau’s relatively small physical space has become a point of concern for the government, so much so that officials are now looking at ways to stem the influx of tourists. Speaking to a local radio show, Macau’s Secretary for Social Affairs and Culture Alexi Tam Chon Weng indicated that the government is reviewing the way it distributes visas, specifically the Individual Visit Scheme (IVS) that’s popular among tourists from the mainland.

If the government can’t find a solution to fix the issue of overcrowding, preventing tourists from coming into the territory will probably be the next logical step, even if it runs counter to attempts by other countries to improve their own tourism numbers.

Implementing a “cap” proposal would put a limit on visitors coming to Macau under the aforementioned IVS, specifically during peak periods like Chinese New Year and the Golden Week in October. Since casinos rely on these two holidays as a major source of revenue, the imposed cap could have a dramatic effect on he industry’s revenue numbers.

According to Tam, such actions would be justified. “If Macau is so crowded that people cannot even get on a bus or cannot find a restaurant for a meal, I believe even the tourists would not like to come,” he told reporters.

While Tam makes some valid points, not everybody is on board with cutting down the number of tourists visiting Macau.

Japanese brokerage Nomura, for one, believes that capping the number of mainland tourists will have a significant effect on the casino industry when it’s already in the middle of the most serious revenue slump in history.

“The cap proposal confirms our view that more tightening policies will be issued,” analysts Stella Xing, Wendy Liu and Harry Curtis wrote in a note issued on Tuesday. “We remain cautious and believe that the Macau casino sector has not yet bottomed out.”

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