Catching mice...

Wow, wow, wow! MICE [Meetings, incentives, conferences, and exhibitions] DSEC statistics for 2015 are out, and guess what, the number of events (909) is up by a staggering 116 y-o-y! Of course, with only MOP$232 million of receipts (including MOP$127 million of public funding) for the whole of 2015, this is equivalent to a bit less than 9 hours of gambling revenues in 2015 (with a bit more than MOP$230 billion for 2015, GGR per hour, despite the dwindling figures, is about MOP$26.35 million...). Also, in terms of number of attendees and participants, there is a drop of 4% to 2.48 million, whereas in Vegas, out of comparison, there were 5.89 million participants in 21,306 conventions and meetings held in 2015. So, Macao is holding 23 times less events than in Vegas but is attracting about 2/5 of the Vegas' attendees! For revenues, it is difficult to compare as Vegas mixes CAT (Casino Tourism) and MICE! But as pointed out by Carlos Siu Lam and John Crossley: "Efforts should be dedicated to creating a unique image and destination experience for Macao under the current resource constraints, rather than simply imitating Las Vegas. Offering different kinds of products is a key aspect in this regard. In a nutshell, the diversification of the tourism and casino industry in a gaming jurisdiction relies on its ability for: (1) enriching its products and services; (2) diversifying its customer mix; and (3) differentiating its image from that of its competitors." This concurs with the conclusions of the PwC report on Building Better Cities...

Kapok: Bottoming at last?

“Bottoming” is the new buzzword that has been on everyone’s lips for a few months now. It intends to convey the positive outlook that our whole economy could soon be recovering after 20 straight months of dwindling gaming revenues. Although it is a very large step away from the more robust “upturn” or “recovery”, one gets the feeling that there is finally some light at the end of the tunnel—even if the light is still distant and the “bottoming” stage surely prolonged.
Beyond the necessary confidence bolstered by casino operators to reassure investors, the “bottoming” credo rests on two main arguments. First, that the shift towards the mass market is finally happening, and that revenues from what constitutes now half of the pie is slowly but surely making gains—only VIP rooms are still steeply declining; and second that the downward trend is decelerating—gaming revenues shrank by 21.4 percent in January 2016 whereas they plummeted by a record 48.6 percent in February 2015. With that perspective in mind, and despite an overall staggering contraction in gaming revenues of 34.3 percent for 2015, one could say that we are now falling at half the pace of a year ago.
All this is very well: casino operators are still turning hefty profits and with an estimated MOP350 billion in GDP for 2015, Macao should still be No. 2 on the world listing of GDP per capita—don’t ask me about distribution though as the last time we “extrapolated” a Gini Index in the SAR was in 2011.
Yet, the “bottoming out”, the real change on the road to recovery, is heavily dependent on the success of the oft-repeated “diversification” and transformation of Macao into “a world centre of tourism and leisure”. The diversification here can be either “path dependent” and/or resolutely novel. The first direction considers the development of tourism as the extension and necessary complement of the gambling industry. Huge properties have already been built, more are scheduled to open (with further delays) in 2016/2017 in Cotai, and then many more will mushroom in Hengqin—Maldives- or Bhutan-like, but all mega in size. Upper mass market is the target, and more in line with the VIP heritage that is presently restructuring. And then there is the entirely new route: think Marina ripping the benefit of an extension of our maritime borders; think business and finance in Shizimen; think creative industries in Xiangzhou Culture Street; think medical tourism investments from well-established local companies; think industrial park; think transportation hub connected with China’s fastest network; etc. In the meantime, local SMEs are being pampered. Energetic young people are opening cafés all around town with generous government funding, and creative industries of all guises are being given the nod.
Indeed, how can one doubt that the next stage of development for Macao has to be found in the periphery if we want to spare the suffocation of Macau’s heart and soul while making the whole ‘MSAR experience’ something that visitors remember and possibly come back to? But the question of the short- and medium-term remains. When will this periphery be up and running? What about the sustainability of all these small service outlets enriching our neighborhoods? Who will actually benefit in the end? Unimaginative and greedy vested interests are also a Macao specialty.
As of now, we had only marginally fewer tourists in 2015 (30.7 million) than in 2014, but tourists still stay on average 1.1 nights per visit (against 3.3 in Hong Kong) and visitor expenditures have gone drastically down with the per capita average registering a staggering 15 percent contraction—so much for the “upper mass market” drive! And then general retail is down too, by 10.4 percent year-on-year—the first yearly decline since 1999! Providing Macao citizens with incentives to consume cannot hurt—“Macao loves locals”—but long-term recovery goals will require bigger sweeteners and a thorough upgrade of the operating system if innovation and talent are to prevail.

© Rodrigo de Matos, MDT

Published in Macau Daily Times, February 26 2016

Kapok: Now, a #fishballrevolution?

What just happened in Hong Kong should not leave us indifferent, and deserves better than short rehashes of the most police-friendly article of the South China Morning Post or anxiety-conjuring front-page pictures of rioters (no demonstrators there…) being “appropriately” contained by duty-blissed (and heavily-equipped) constables. First, because even though it happened in the early hours of the second day of the fiery fire monkey year, “squabble day” (Chek Hau) actually falls on the third day, so, clearly, the whole episode marks more than the calendar! Second, because even pro-Beijing legislator Regina Ip—the one who, as secretary for security, failed to sell article 23 to Hong Kong people back in 2002-2003—views it as somehow reflecting the inability of the Hong Kong government to tackle the deep-rooted issues affecting the SAR. And finally, because these events hold a universal message that not even our neon-glowing out-of-this-world gaming paradise should ignore.

Scenes of street-battle in Mong Kok happening at a time of supposedly festive and rejuvenating mood helped capture our imagination, and added to the sense of “disproportionate” incongruity between the trigger—the expulsion of illegal street hawkers by police-backed agents of the Food and Environmental Hygiene Department around Langham Place—and images of intense clashes between policemen and demonstrators, possibly not seen since the 1960s. Soon characterized as “riots”, as to delegitimize the whole affair (and probably frustrate some insurance claims!), what had started as a “quarrel” between the hawkers and officials grew into fierce opposition to state authority after a so-called “localist” group, Hong Kong Indigenous, encouraged people through social media to come and support the hawkers. Violence erupted: cobblestones were dislodged from the pavement and thrown at the police; chubby orange-colored rubbish bins set on fire; windows and surveillance cameras broken; police sticks heavily fell on necks, backs and shoulders; warning shots were fired; blood was spilled and participants as well as policemen injured; journalists were threatened by both sides and arrests were made—dozens of them. Yet, at the height of the confrontation, no more than 300 people participated!

All that sound and fury for a “fish ball revolution” of 300? And if violence is to be utterly condemned and responsibilities have yet to be fully established what is this protest in aid of?

In an enlightened op-ed, Jason Y. Ng makes a direct connection between these events and the Jasmine Revolution—I immediately thought of the 228 in Taiwan back in 1947—with the warning that one should “never underestimate what the little guy can do.” For Ng, who equates the hawkers with Mohamed Bouazizi in Tunisia, such dramatic events can only happen because of short- as well as long-terms dysfunctions of the Hong Kong government, with the little people—booksellers included!—feeling more and more like helpless victims, in a wider context of broken promises—social, economical and political. Beyond the almost exclusive blame put on C.Y. Leung “dismantling the city bit by bit”, Ng’s final comments sound like a resounding warning: “Unless we find a way to cool the rising political temperature, it is perhaps a matter of time before we have our very own Mohamed Bouazizi and protesters set more than just garbage on fire.”

A study released in mid-January by The University of Hong Kong actually showed that the Public Sentiment Index had hit a 20-year low, even lower than in 2003 at the time of the combined SARS and Article 23 crises, or at the end of 2014 during the Umbrella Movement. The Index is precisely meant to quantify Hong Kong people’s sentiments “in order to explain and predict the likelihood of collective behaviour”!
What about Macao then? Is there a “localist” movement? Is civil society mature enough to escape the grip of traditional associations? Is the government perceived as doing the right job and is it fully trusted? One would be hard-pressed to find a hint of scientifically grounded survey regarding any of these issues… let alone anticipate them!

Published in Macau Daily Times on February 12th 2016