Tough Year Prompts Rethink over Tourism Income in Macau
The past decade has seen a huge transformation in the tiny territory of Macau. It used to be an inconsequential Portuguese colony, but it is now one of the most lucrative destinations for high stakes gambling. The revenues made by Macau casinos make the numbers coming out of Las Vegas seem small. Billions of dollars are bet every year by high rollers, especially tourists from China and South-East Asia.
Revenues for Macau casinos were still impressive in 2014, but they fell short of the figures posted in 2013. Casino owners were expecting more increases, as has been the case every year for the past decade, but the reality was completely different. From the summer onward, Macau casinos were posting lower figures than they had in those months last year.
With a significant decline in the high rollers traveling to Macau from China, the territory needs a new strategy for the future. Their casinos will still remain profitable, but their steady increases per year may be a thing of the past. For investors to remain interested in Macau, the territory needs to find new tourism revenue besides gambling.
Gambling analysts believe that Macau has a unique chance to brand itself as an all purposes entertainment destination. Instead of catering solely to high rollers and gamblers, they need to become a family vacation site.
Both casino operators and the Chinese government is hopeful that Macau can make this transition over the next few years. Building family friendly areas and other types of entertainment sites should attract a new category of tourists to the area.
When comparing Las Vegas and Macau, the non-gambling revenues are the most startling. Vegas makes 60% of its money from non-gambling sources, while that figure is only 10% in Macau. Vegas could survive and thrive in a year of less gambling, but Macau would struggle to cope.