In his second policy address since taking office last December, Macau chief executive Sam Hou Fai has reiterated his pledge to review concessionaires’ non-gaming investments.
Through 2032, those investments will total an estimated US$16 billion. They are part of a larger strategy to shore up the local economy and reduce Macau’s reliance on gaming.
Through its “1+4” development strategy, Macau is committed to the growth of the medical, technical, finance and events sectors. Together, they are expected to strengthen the hospitality industry and support Macau as a global tourism destination. The government has set a target to derive 60% of gross domestic product from non-gaming attractions by 2028. It’s an ambitious goal, as in 2019 they contributed just 16% of GDP.
Ongoing global turbulence poses a risk to any economy that relies on a single industry, Sam noted. That vulnerability became plain during the Covid-19 pandemic, which shut down the city and its chief industry for three years.
Macau must move swiftly, he said, “cultivating internationally competitive new industries [and] effectively implementing the ‘1+4’ objectives”.
‘Tourism-plus’: Promoting Macau on the world stage
Currently, almost 73% of visitors to Macau come from mainland China. Maria Helena de Senna Fernandes, head of the Macao Government Tourism Office, is working to change that. She has travelled the world to promote the city in medium- to long-haul markets including India, the Middle East, Europe and other regions including Northeast Asia.
Senna Fernandes has noted Macau’s global appeal: “more than 400 years of East-meets-West historical heritage, side by side with state-of-the-art integrated resorts”.
Visitor arrivals reached nearly 30 million through September, with international tourists accounting for approximately 1.19 million. For the same period, GDP reached about MOP301.33 billion, up 4.2% year-on-year. The government collected MOP88.8 billion in tax revenue, an increase of 3.3%.
Consultant: Gaming still the star of the show
Can Macau reach its target of 60% non-gaming GDP by 2028?
“Unfortunately, this is unrealistic,” Steve Gallaway of GMA Consulting told iGaming Business. “It’s customer preference-driven. While significant enhancements and offerings of non-gaming products will help diversify the economy, gaming will still receive the majority of customer spend.”
He said concessionaires should invest in “enhanced transport infrastructure, airport upgrades, monorail extensions, roads, etc”. He added that the city should expand family- and child-friendly offerings and entertainment.
Macau chief executive Sam Hou Fai says he will continue to review non-gaming investments from the city’s Big Six casino concessionaires in seeking to reduce reliance on gambling revenue.