Welcome news for Macau
China continues to loosen its COVID-19 border controls. This week sees the country open up its borders to a list of 20 nations, including Australia, New Zealand, Singapore, the Philippines, Cambodia, and South Korea. This follows the decision to end inbound quarantine on January 8.
Also included on the lists are China’s Special Administrative Regions (SAR). Notably, this includes the gambling hub of Macau, with new provisions allowing travel companies to sell group tours to the region.
China’s COVID quarantine policies have greatly restricted travel
The past three years have hit Macau hard. China’s COVID quarantine policies have greatly restricted travel to and from the mainland. On top of this, China’s junket crackdown, which culminated last year in the arrest of Alvin Chau, has cut the flow of money into the SAR significantly.
The grey market closes
Until his arrest, Chau was CEO of the Suncity Group, which operated around 40% of the junkets into Macau from mainland China. He was found guilty of 103 offenses last month—though the court notably cleared him of money laundering—and Suncity no longer offers junket tours as a result.
China limits its citizens to overseas withdrawals of RMB100,000 ($14,744). In the past, Macau’s high rollers could get around this strict FX limit by borrowing Macanese pesetas or Hong Kong dollars from their junket operator in Macau.
After Chau was arrested, junket revenue dried up almost entirely
Once the customers returned to the mainland, they would then pay back the junket operator any remaining debt in renminbi. China’s crackdown on junket operators saw this grey-market exchange shrink. After Chau was arrested, junket revenue dried up almost entirely and casino operators have had to rely on high rollers much less.
Despite these setbacks, Macau has seen an impressive turnaround. In January 2023, Macau hit a three-year high in revenue. Macau’s casino operators have refocused their efforts on mass market gambler and expanded marketing for the non-gaming aspects of their integrated resorts.
A fight for tourists
Outbound Chinese tourism was at 170 million trips during 2019, mostly before COVID hit the headlines. Current estimates expect to smash past those numbers over the next few years, hitting 228 million by 2030.
Macau is aiming to get around 40 million of those trips per year, but it will be competing with Hong Kong for that market share with the Chinese policy on visas pitting them against each other.
The two SARs are popular tourist destinations for residents in China, and both are trying to get as much of the pent-up demand as possible. To that end, the Hong Kong government has sponsored 500,000 free flights to various APAC countries. In response, Macau has announced it will distribute 120,000 flights from the mainland direct.
Between the two SARS, around 90 travel agencies have been given sponsorships to boost tourism, allowing some travelers from China province to head to Macau for just US$50. That number drops to US$35 if they are coming from the neighboring Guangdong province.