Three weeks after easing border restrictions with neighboring Guangdong province, Macau is plunged into a pandemic outbreak. Both authorities and companies expected a summer with an increase in visitors and revenue, but the reality is now different. Associative leaders and businessmen talk about the heavy blow to the tourist industry, but say that if everything is resolved by mid-July, there are possibilities for economic activities to resume in August, towards recovery.
On June 2, the validity period of nucleic acid tests for those coming from Guangdong was increased from 72 hours to seven days. Authorities and members of the tourist industry saw this relaxation of borders with the neighboring province as a good omen for the summer holidays, with the first days of the month confirming this projection, with a daily average of 23,000 visitors – significantly higher than that verified in the year 2021.
However, last Sunday, Macau declared a state of immediate prevention, after detecting 12 cases of Covid-19, eight of them asymptomatic, and decided to proceed with mass testing of the population within 48 hours. Naturally, there was also a change in the entry requirements to the city, with visitors from Mainland China having to present a negative test valid for 48 hours, replacing the seven days previously imposed.
If in the first months of the year, namely January and February, there was an increase in the number of visitors arriving in Macau compared to last year, the truth is that this trend has reversed since March (see graph nº1). From January to February, around 1,349,935 people entered Macau, 37 percent more than in the same period in 2021. However, from January to May, the city welcomed only 3,084,436 people, 314,874 fewer than in 2021, from according to data from the Directorate of Statistics and Census Services (DSEC). This means that, so far, there has been a drop of 9.2 percent compared to last year, largely due to the outbreaks of Covid-19 in Mainland China.
But outbreaks at the local level have proven to further worsen the tourist flow. The two worst months of last year were August and October, respectively, in which Macau also encountered cases of Covid-19 domestically (see graph nº2).
Summer is not lost
The suspension of guided tours for residents was one of the first blows to the tourist industry. To the Macau Daily newspaper, the president of the Macau Tourism Industry Association, Andy Wu, says that the cancellation of “Tours, gastronomy and accommodation for Macau residents” will certainly be difficult for the industry. The official says that the local tourist itinerary would have 6,000 participants next week. In addition, in the “Itineraries for study visits”, he informs that there would be more than 30,000 students to participate in them. The Macau Hotel Association, which represents 59 four- and five-star establishments in the region, admitted to Lusa that, despite supporting the Government’s prevention policy, the measures had brought the recovery plans to a halt.
However, the association’s vice president, Rutger Verschuren, indicates that he still has some hope in August. “Given the current situation, we can say goodbye to June and at least half of July, but we have some hope in August”, he noted, pointing out that “with an outbreak like this it takes at least two months for [the sector to start] to recover” .
The president of the Macau Association of Restaurant and Beverage Owners Association also told Lusa that everything “depends on how the Government manages to control the transmission of the virus. If all goes well, I predict that next week everything will return to normal”, said Chan Chak Mo, stressing that he hopes that the authorities will create, “later, if possible, an economic assistance plan”.
Since Thursday, restaurants are only allowed to carry out home delivery operations. Don Lao, one of the owners of Voyage Thai Kitchen and Café Voyage, tells PLATFORMA that “the great source of income” for his restaurants is the dine-in service. “Our home delivery service doesn’t pay as much,” he confesses. The official explains that the fact that employees had to travel to do the nucleic acid test also harmed the business, which was left with a lack of human resources. At Café Voyage, for example, he says that the establishment located in the Hang Wan Kok Building only earned 600 patacas on the day the outbreak became known – a figure that is frankly less than enough to support the space.
Contacted by the newspaper, the president of the Association for the Study of Political Economy, Samuel Tong, explains that the fact that Macau is mostly dependent on its tourist offer means that epidemic outbreaks put additional pressure on the economy. However, he analyzes that the work of epidemic prevention and coordination between border authorities has improved over time, with the mitigation of outbreaks being faster and more effective. If this is confirmed, he believes that within a short time the activities planned for the summer will be resumed.
Support is welcome, but it doesn’t solve
“Although we are at the end of June, there are still chances to resume in August or September”, points out Samuel Tong. On the economic impact of this new outbreak, he explains that it will always have consequences for employment, but that the financial packages implemented by the Government are an important help.
The Government announced on Sunday seven measures to support companies and Macau residents, totaling ten billion patacas (1.2 million euros), supported by the financial reserve, ranging from tax benefits to a one-year moratorium. repayment of subsidized loans.
“For now, these are good measures, but it all depends on the progress of the pandemic. If it persists and [tourists] cannot enter Macau, this could indicate an imminent and recurring problem and I think the Government should look into the situation”, said Chan Chak Mo, also a member of the Legislative Assembly.
Synthia Chan, representative of the area of conventions and exhibitions (MICE), a sector “continuously affected” by the pandemic, was more skeptical about the economic support announced by the Executive. “It doesn’t help the industry, as I understand it”, stressed the president of the Macau Trade and Exhibition Association to Lusa. “The MICE sector depends a lot on tourists from China or abroad for the events to be successful”, he says, stressing that “Macao is a very tourist destination” and MICE travelers are “the top of the tourists” and those “who are willing to to spend money”. “This outbreak now, with the border restrictions – which we understand – is not going to allow the economy to recover,” she adds. “Many workers travel between Zhuhai [border town] and Macau, and if they cannot do so, they have to stay somewhere. Since they don’t have an apartment, they can book a hotel, but of course, [now] they can’t use the facilities, because nothing is open,” she notes.
Samuel Tong points out that the Government was very quick to present solutions to the population and companies, saying that the most important thing is to “keep people’s trust”. On specific aid for the most vulnerable economic sectors, he argues that it takes time to be able to evaluate and decide in the best way, clarifying that it will have to be done “in stages”. However, he does not fail to note that to accelerate economic recovery, it will always be necessary to summarize tourist activities, which for now are conditioned by the “volatility and uncertainty” of the Covid-19 pandemic.
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