Macau marked a significant milestone on Saturday last week as it recorded the highest daily influx of visitors since the outbreak of COVID-19.

Post-pandemic revival of unprecendented visitor rate

Cheng Wai Tong, Deputy Director of the Macao Government Tourism Office (MGTO), reported the impressive figures during a press conference. He stated that a remarkable 139,000 visitors were welcomed to Macau, an increase of 56 percent from July’s daily average of 89,000. This figure represents the highest daily arrival tally in three-and-a-half years, illustrating the region’s steady revival.

In August, the daily average of visitor arrivals already surpassed 100,000. While visitor volume may not always correlate with Macau’s casino gross gaming revenue, JP Morgan Securities estimated a market-wide Macau GGR of MOP7.20 billion (US $894.1 million) for the first 13 days of August. Macau visitor figures usually rise during holiday periods with a positive impact on casinos and tourism facilities.

Macau’s recovery and diversification

After the lifting of zero-Covid measures, Macau experienced siginficant achievement in the daily visitor rate.The city’s recovery efforts were shadowed by the extended border closure that deprived Macau of its essential mainland Chinese patrons, who pre-pandemic contributed to more than half of the gaming revenue. The setback brought a downturn in Macau’s GGR in Macau and 2022 turned out to be one of its most challenging years on record for the industry.

Six major gambling operators developed a strategy to further diversify into non-gaming sectors, a requirement stipulated with the renewal of their operating licenses. Driven by government’s push to reduce dependency on gambling, these investments, spearheaded by SJM Holdings, MGM China, Galaxy Entertainment, Melco Resorts, Sands China and Wynn Macau, totalled US $14.9 billion for the award of 10-year franchises. The bulk of this funding, approximately just over 90 percent, targets non-gaming ventures such as theme parks and exhibition venues, and the expansion of conference venues for overseas markets.

Challenges for the sector

Concerns persist about potential government revenue decline, given that gaming generates over 80 percent of Macau’s earnings. Despite non-gaming revenue contributing less than 15 percent to casino income in 2019, the success of the new investments in sustaining market mechanisms remains uncertain.

Investors and US-owned casino licensees have expressed confidence though in the local market even though recovery is expected to be gradual. Analysts anticipate Macau’s 2023 gaming revenue may reach 50 percent of 2019 levels, but full recovery could extend another two years.

Challenges including stricter VIP junket operation rules and ongoing legal proceedings that challenge the revival of high-spending gamblers. Macau’s diversification pursuits remain pivotal for the sector’s economic revival to maintain its global status as a global gaming hub.

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