A factual analysis of visitors to Macau

In the last post I had written about the distribution of the labor force of Macau, relying mostly on official government data to visualize Macau’s current situation. In this post I once again base my charts and diagrams on the official statistics on Visitors to Macau (as released by DSEC).

Taking the figures of Q1 2010 to Q2 2013, i.e. the period of time after the financial crisis and as marked by the construction and openings of Galaxy Macau (Q2 2011) and Sands Cotai Central (Q2 2012), it is remarkable to notice the following trends:

  • An overall increase of  visitors from China (up from 3.3 million in Q1 2010 to 4.4 in Q1 2013)
  • An overall decrease of visitors from the rest of the world (2.78 million in Q1 2010 to 2.6 million in Q1 2013)
  • This leads to an overall increase of visitors to Macau (6.1 million in Q1 2010 to 7.07 in Q1 2013)
Distribution of visitors into three groups: Mainland China / Hong Kong and Rest of World

Distribution of visitors into three groups: Mainland China / Hong Kong and Rest of World

Having a closer look at the growth and decline percentages quarter to quarter (2011 to 2013) the following negative trends are visible:

Growth/Decline Rates of all three visitor groups

Growth/Decline Rates of all three visitor groups

This means that Hong Kong visitors are in decline since Q4 2011 (on a comparative quarter to quarter basis) and the rest of the world has decided to decline since Q2 2012 (once again on a quarter to quarter basis).

This is especially interesting as it suggests that despite opening of two major Casino resorts, Macau was not successful in establishing a steady growing visitor base apart from China. In contrary, as far as it looks, the dependency of Macau’s Casinos on Chinese customership has increased year by year, quarter to quarter. An interesting (yet disputable approach) is to overlay the Q/Q mainland Chinese visitor growth with the Q/Q GDP growth of mainland China:

Q/Q growth rate comparison of Chinese GDP and Mainland Chinese Visitors to Macau

Q/Q growth rate comparison of Chinese GDP and Mainland Chinese Visitors to Macau

What does the above mean? A few points:

  • Both China’s economy and the overall number of Chinese visitors to Macau grow from Quarter to Quarter and from Year to Year.
  • The increase of visitors to Macau from mainland China is stronger than the growth in GDP in mainland China at the same time
  • There are a lot of interfering factors that would have to be taken into account for a closer analysis, such as travel restrictions and the appearance of other travel destinations nearby (which are attractive to Chinese mainlanders)

Yet still, what can be said about the above situation is that Macau is more and more dependent on visitors from Chinese countries and whatever efforts have been taken in the last years to increase other customer groups, have failed. This is even more interesting when one has a look at the total hotel & casino industry key figures and their own increase during that time:

Comparison of total visitors with hotels increase in Macau

Comparison of total visitors with hotels increase in Macau, figures as found on DSEC: Hotel and Similar Establishment Survey

Going the next step one can analyse how many available rooms there are in Macau (as of the time of above estimation) against the total number of visitors:

Available Rooms vs. Total Numbers of Visitors per Year

Available Rooms vs. Total Numbers of Visitors per Year

This means that the potential for hotels in Macau is not yet reached, which is in line with current development plans at Cotai Strip, adding the following Casinos to the market:

Overview of New Casino Hotel Rooms and respective overall capacity

Overview of New Casino Hotel Rooms and respective overall capacity

In summary:

  • Macau is ramping up its efforts to enable more visitors to stay and gamble in Macau
  • Chinese visitors are the largest group among all visitors
  • Other visitors are in decline (yet still a conceivable force)
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