Group Travel From China to Macau Resumes, Helping Replace Lost Junket Revenue
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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.
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.
Also included on the lists are China’s Special Administrative Regions (SAR). Notably, this includes the mini game cassino online hub of Macau, with new provisions allowing travel companies to sell group tours to the region.
Despite these setbacks, Macau has seen an impressive turnaround. In January 2023, Macau hit a three-year high in revenue. Macau’s Online Casino operators have refocused their efforts on mass market gambler and expanded marketing for the non-gaming aspects of their integrated resorts.
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.
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.
After Chau was arrested, junket revenue dried up almost entirely
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.
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.
A fight for tourists
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.
China’s COVID quarantine policies have greatly restricted travel
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.
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 Online Casino operators have had to rely on high rollers much less.