Large number of vacant shops have appeared on the streets of Macau this year, ranging from the new immigrant-intensive areas near the Red Market in traditional local resident districts of Macau, such as the Avenida do Conselheiro Ferreira de Almeida, the Starlight Gallery on Avenida do Almirante Lacerda, and Rua das Mercês, to areas with many new immigrants like the Northern District of Ilha Verde, and even tourist areas are not exempt. Similarly, like Macau, Hong Kong, which promotes “northbound consumption,” has also witnessed the phenomenon of bustling areas with vacant shops, following in Macau’s footsteps.
Since the government opened up the “Macau cars going to the north” last year, many Macau residents have even gone to Zhuhai for tea, and famous northern district restaurants like Kam Koon Kei Restaurant have closed down,” said a local Macau resident, Li Chengen, to Dajiyuan.
The term “Macau cars going to the north” refers to Macau private cars that can enter Guangdong through the Hong Kong-Zhuhai-Macao Bridge checkpoint after successful reservation. The policy was officially implemented starting on December 20, 2022. In Hong Kong, “Hong Kong cars going to the north” refers to Hong Kong private cars traveling between Hong Kong and Guangdong province through the Hong Kong-Zhuhai-Macao Bridge checkpoint after successful reservation, with the policy being enforced from July 1, 2023.
Macau’s GDP growth in the first quarter of this year reached an official figure of 25.7%, however, the sudden increase in vacant shops has been dubbed as a “paradox” by the Macau Economic Association. From the photos provided by Li Chengen, the streets of Macau’s residential areas have recently appeared deserted, with almost all shops closed, lacking the hustle and bustle of yesteryears.
A Facebook group that was renamed in April this year to “Macau Shop Closure and Business Shutdown Awareness Group” now has 32,700 members, sharing information on the closures of shops in different areas of Macau. The market situation is at odds with the 25.7% economic growth figure, according to data from the Macau Statistics and Census Bureau, there were 2.692 million visitors to Macau in May this year, representing a 21.61% increase year on year.
However, the number of visitors to Macau in the first five months of this year reached 14.169 million (see table), a decrease of 17.57% compared to the same period before the pandemic; the average spending per tourist in the first quarter was MOP 2,293, which is a 40% increase from 2019, but a 24% drop from MOP 3,027 in the first quarter of 2023. In addition to the budget travel guides for Hong Kong, there have also been guides on “free food and drink in Macau” on platforms like Xiaohongshu, including free tourist buses and dining provided by Macau casinos, allowing for a day in Macau with zero spending.
According to Li Chengen, who works in the casino industry, although Macau’s tourism industry has seen some recovery, most visitors now only spend money in casinos. “There are more budget tourists and far fewer high rollers now, with the average spending being about half of what it used to be,” he said. Furthermore, the nature of gamblers has also changed, “Previously, many people were just here for leisure with spare money, but now, many are gambling in an attempt to improve their lives. There are more visitors who cannot afford to lose and resort to extreme measures, leading to an increase in hotel suicide cases.”
Unlike Hong Kong, Macau’s casinos serve as comprehensive one-stop travel destinations, encompassing most of Macau’s hotel, gambling, entertainment, consumption, and dining needs. According to the website of the Venetian Macao casino, a popular tourist destination is the branch of Andrew’s Bakery and Cafe, a go-to spot for many visitors, inside the casino; traditional pastry shops like Koi Kei and Confeitaria Choi Heong also have their stores in various casinos, obviating the need for mid to low-range spenders to buy souvenirs in the traditional tourist areas.
The economic development of both Hong Kong and Macau is heavily reliant on the idea of gambling, serving as a primary source to attract hot money. Macau Chief Executive Ho Iat-seng stated that the gaming industry accounted for approximately 36.2% of Macau’s GDP in 2023, down from a peak of around 63% in the past. However, according to data from the Macau Statistics and Census Bureau, Macau’s gaming revenue for the first half of this year was MOP 113.753 billion, a 42% increase compared to the same period last year, but still down 24% when compared to 2019 before the pandemic. Macau’s GDP in the first quarter was MOP 104.809 billion, only a 6.1% decrease from MOP 111.622 billion in the first quarter of 2019. The decline in the gaming industry’s proportion is primarily attributed to the contracting gaming revenues, subsequently affecting the physical store consumption.
Macau relies on the gaming industry, while Hong Kong’s economy is closely tied to its stock market, accounting for 22% of the Hong Kong economy, with one key indicator being the daily turnover figures of the Hong Kong Stock Exchange (stock code: 0388). As per the Hong Kong Stock Exchange, the average daily turnover for the first six months of this year was HKD 110.4 billion, a 4.42% decrease from the same period last year. Since stock trading takes place online, the stock market remained unaffected during the pandemic, unlike the situation with Macau’s casinos that require in-person visits, with the daily turnover reaching a peak of HKD 166.73 billion in 2021, now down by 33.79% compared to 2021. As of the market close on July 8th, the Hang Seng Index stood at 17,524 points, a 37.8% decrease from 28,189 points at the end of 2019, resulting in the inability to generate more income from turnover and substantial wealth evaporation in stock values.
Local consumer spending is struggling to pick up momentum. While Hong Kong is witnessing a surge in northbound consumption, a similar trend is emerging in Macau. According to data from the Macau Public Security Police Force, the number of residents departing Macau in the first five months of this year reached 15.52 million, a 22% year-on-year increase. Even Macau Chief Executive Ho Iat-seng urged residents in April at the Legislative Assembly to spend more in Macau, stating, “Have one meal in Macau instead of heading to the mainland for all three meals.”
Even with the Macau government distributing money again in July, giving MOP 10,000 to permanent residents and MOP 6,000 to non-permanent residents, Macau has around 180,000 foreign workers, accounting for nearly half of the total labor force of 372,000 people. Some analysts point out that these foreign workers may not reside in Macau but live in places like Shenzhen and Zhuhai just as professional talents from Hong Kong do, only crossing the border for work in Hong Kong and Macau, creating no significant contributions to local consumption after receiving their salaries and government handouts.
Since the enactment of the regulation on importing foreign workers in 1988, Macau’s population structure has changed significantly over the past 34 years, with the number of foreign workers nearing 200,000 becoming the norm (see chart), representing a notably high proportion compared to Macau’s population of 686,000. With the demographic shift in Macau, as mentioned earlier, tourists are directed towards comprehensive consumption at the casinos, while local residents and foreign workers venture north for holiday consumption. Despite Macau’s economic growth of 25.7%, closures of local shops are still prevalent.
In late May, the UK Home Office released the latest figures on BNO visa applications, indicating a nearly twofold increase to 10,737 applications in the first quarter of this year compared to the fourth quarter of last year, reflecting a continued influx of immigrants. Conversely, Hong Kong began significantly increasing the intake of foreign workers and talents last year. The Hong Kong government revealed that by March, a total of 110,000 individuals had come to Hong Kong under various talent schemes, closing the gap with Macau’s intake of foreign workers.
In April this year, Hong Kong’s Secretary for Labour and Welfare, Law Yat-han, responded to questions in the Legislative Council, stating that the government will continue to attract foreign talents, as the influx of mainland population into Hong Kong continues, indicating an ongoing shift in the local population, possibly following in Macau’s footsteps or just a matter of time.