Macau's Tourist Spending at Risk from U.S.-China Tariff Dispute

The ongoing trade tensions between the United States and China are casting a shadow over the spending habits of Chinese tourists in Macau, according to insights from the tourism industry. Several professionals in the sector have voiced their worries to GGRAsia, highlighting the potential impact on the local economy, which heavily relies on tourism from the Chinese mainland. While the volume of tourists may not see a significant change, the economic value they bring could be compromised due to a dip in consumer confidence spurred by geopolitical tensions.

Insights from Industry Leaders

Andy Wu Keng Kuong, president of the Travel Industry Council of Macau, emphasized that the flow of visitors from Guangdong province, a significant source of tourists for Macau, is expected to remain stable. He stated, "In terms of the flow of travellers heading to Macau – where many are from Guangdong province – I don’t think we’ll see many changes to the volume… which has been robust so far." However, he also pointed out that Chinese consumers are likely to remain cautious with their spending amidst economic uncertainty.

He noted, "Chinese consumers will likely continue to be very cautious on their spend, when economic uncertainty persists." Wu also raised concerns about the devaluation of the Chinese currency, the yuan, stating, "Since last year, we have seen that Chinese consumers’ spending power has already weakened. That was, apparently, reflected in Macau’s retail businesses." He added, referring to geopolitics, "With what is happening now, this trend will just likely continue."

Hoffman Ma Ho Man, deputy chairman of Hong Kong-listed Success Universe Group Ltd, shared his perspective on the short-term effects of the U.S.-China trade dispute on Macau's tourism. He remarked, "The trade war issue might have some sentiment-driven impact on the city’s tourist trade in the near term," to GGRAsia. Ma's company, an investor in the Ponte 16 casino resort in Macau’s Inner Harbour district, maintains a cautiously optimistic view on the gaming and hospitality sectors. He stated, "I think by now, the worst of the news that impacts economic sentiment has all come out."

Despite the challenges, Ma noted that table game bet limits and minimums at Ponte 16 have actually increased on average so far this year. He highlighted the upcoming May 1 holiday, saying, "The key period for the sector to watch out for will be the upcoming May 1 holiday," which is a peak season for Macau, encompassing Labour Day and extended to a five-day break from May 1 to May 5 by China’s State Council.

Economic Implications and Future Outlook

The broader economic context in China, already facing a moderation in domestic consumer demand, adds to the concerns about potential turbulence in Macau's market due to U.S. trade policies. Equity research provider Morningstar has noted that "geopolitical and U.S. policy actions increase the risk premium" for the stock prices of American casino operators with exposure to Macau’s gaming market. In terms of recent performance, casino gross gaming revenue (GGR) in Macau saw a year-on-year increase of 0.8 percent in March but experienced a sequential decline of 0.4 percent, according to official data.

On April 1, Macau’s Secretary for Economy and Finance, Tai Kin Ip, expressed caution regarding the outlook for the city’s public finances for the year, indicating that casino GGR might not meet the government's target of MOP240 billion (US$30.0 billion). Under the new 10-year gaming concession system effective from January 1, 2023, the effective tax on GGR is set at 40 percent.

Source: Chinese tourist spending in Macau at risk from U.S.-China tariff row: industry reps, GGRAsia.com, April 10, 2025.

Posted by Wizard
Apr 11 2025