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Upheaval rife as Macau shifts away from its role as a casino destination

Posted by DG, Date posted at February 13, 2023

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There will be changes to Macau’s image in the coming months which have been causing upheavals not only with the public perception but the sentiments are also shared by those in the legislative branch of the city. 

Yes, tourists have returned to Macau after the famed casino hub reopened borders on January 8, 2023. The foundation on which Macau’s economy, the gambling industry, has been generating over 70% of the government’s income from 2014 through 2019. 

The struggle comes with China’s central government’s directive to the Macau administration to move away from the casinos as the major source of income for the territory. This is to increase the non-gambling revenue and other tourist attractions that will develop Macau into a “world centre of tourism and leisure”.

These are tough mandates to follow with how Macau has firmly established itself as a major thoroughfare for casino resorts. So much so that at one point, Macau earned far more revenue than that Las Vegas.

To this cause, the South China Morning Post sought to get a pulse on how the locals and other reputable people involved in the development of Macau see this direction to drastically change Macau that they have always known.

Hearing from the locals of Macau

The owner of Cafe Tai Lei Loi Kei, a very popular tourist destination for its legendary Portuguese pork chop buns, Chan Ka I, said that “After the border reopened on January 8 tourists have just kept rushing in. There’s no time for us to rest. Our revenue has gone up at least 50%. People are spending money on water. It got even better when the Macau-Hong Kong border reopened, so this Lunar New Year has been pretty good.”

Cafe Tai Lei Loi Kei

For over three decades, Chan Ka I’s Cafe Tai Lei Loi Kei saw itself as a popular destination for travellers visiting Macau. In 2019, they had 7 local branches and consumed over a ton of pork chops daily. However, during the pandemic, this dropped to a mere 22 kilos of pork a day.

Chan added, “It was so desperate in 2020. We had to close after we were fully stocked on the second day of the Lunar New Year.  No one was here, it was so sad.  Then we closed for a while since no one was coming during the holiday.”

She further expressed, “We thought it would be over a few months, then three years passed by.  We kept having no-pay leaves and salary cuts. Some days we would just close the shop. Luckily, we own our shop, otherwise, we would have closed down very early on.”

Even through the painful downturn of the business during the peak of COVID lockdowns, Chan said she still fully supports the government’s directive with its policies and measures to control the virus from further spreading.

She replied, “When the government announced the lockdown, we closed down completely for a whole month. We needed to work together to end the pandemic. We fully supported the government and our country during those hard times.”

Macau closely followed mainland China’s Zero Covid policy and only allowed quarantine-free travel to the mainland. It may seem surprising that tourism-centered businesses like Chan’s supported the travel restrictions completely. 

Lawmaker Ron Lam added his insight to this matter. He said that keeping the border open with the mainland is indispensable in the city’s daily operation. He further explained, “The working population in Macau is roughly 460,000. Close to 100,000 are cross-border commuters from the mainland. Many of them work in grassroots-level jobs, which maintain the daily operations of the city.

If the mainland border is closed, many supermarkets and businesses could not even open for business. Foreigners may see Macau following mainland China’s border restrictions to be a political and economic decision. But speaking as a local, following mainland China’s Covid policy is our only realistic option.”

Belief in adhering to China’s zero-Covid policy sees that Macau’s tourism industry bounces back quickly, as 70% of tourists were from the mainland in pre-Covid times.

You might also want to see: Macau mulls over future despite casino resort tourists return

Macau’s history as a premier casino destination

In the past, Macau’s gambling industry generated over 70% of the government’s income and provided 20% of jobs in the city.  But as the pandemic hit, 20% of casino workers in Macau lost their jobs. As a result, many began looking for new and sometimes unusual ways to make a living. 

The border behind me used to be the busiest port in the world before the pandemic (Praca das Portas Do Cerco). There are many pharmacies and shops in this area dedicated to parallel trade. Macau and Hong Kong are free ports with no tariffs, but the mainland has tariffs, so products across the border have a distinct price difference. 

“For a long time, many locals have been carrying small amounts of products across the border for resale. It was very busy here during the pandemic, much busier than before Covid. And many of those who lost their jobs did this to make a living. We’ve handled plenty of cases like that.” Lam further digressed on the matter, “Macau needs to diversify its tourism industry for locals to pursue different professions. In early 2008, China had already positioned Macau to become a “world centre of tourism and leisure”, an effort to move away from its reliance on gambling.”

In the latest casino licence bidding, casino operators have also pledged to invest over 90% on non-gambling projects in their resorts. Some observers said the real problem is not about the infrastructure and facilities, but how the city promotes itself to tourists. 

An Associate Professor in Integrated Resort and Tourism Management at the University of Macau, Glenn McCartney, shared his insight on the shift away from the gambling industry, “I believe if you travel around Cotai, the hotels that we have, the luxury five-star complexes that we have, some are international brands — so, yes we have products that are world-class I believe. 

But really, in the world of marketing we don’t present the product, we present a solution to the visitor in terms of what they want. If you have business travel or convention conferences, or you go to Guangzhou, they have a lot of meeting space. 

Now just over the border in Hong Kong, the convention centre, Singapore, so competition is everywhere. We can pitch it, but it has to be believable for our potential tourists when we go to market, in terms of enlarging our visitation.”

To further diversity Macau’s economic structure, China has announced plans for Macau to work with Gangdong’s Hengqin Island to develop new major industries, such as high-end manufacturing and scientific research.

But lawmaker Ron Lam thinks Macau should first consolidate its own advantages before blindly venturing into new sectors.

Lam further ruminates on that matter saying, “What I worry the most is that we blindly support “regional integration”, and in the end, Macau will lose its unique positioning and identity. Then we will lose all of our competitiveness.

After the massive impact of the pandemic, there’s no doubt that we need to diversify our economy. But I think some ideas have become too extreme. An official told me that they aim to erase the label of Macau as a “gambling city”. This is just unrealistic. If we abandon our position as a casino hub, here’s my question: what else have we got?”

It is heartbreaking to see that so many are affected by the directive from mainland China to shift from how Macau was very successful in establishing itself as the premier casino hub of Asia. Indeed this has to go slow and steady over a long period of time. After all, the competition surrounding Macau has already had decades having had themselves established in their own market niche. Would this be the right move for Macau? Can mainland China be swayed into taking a slower pace on shifting away from the success that Macau was able to build in the past? Let us know your comments below. Hope to hear from you guys, soon. Cheers, and stay safe.

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