decline in local consumer spending to the increasing willingness of Macau residents to head “north” to mainland China for their consumption. (interview)

 may25

Macau is likely to face challenges in offsetting the resulting decline in local consumer spending in the short term, said Aeson Lei, president of the Macau Catering Industry Association.

The F&B representative attributed this trend to the increasing willingness of Macau residents to head “north” to mainland China for their consumption.

“While the government has implemented various measures, like consumer promotion campaigns, which have somewhat boosted market consumption, particularly in the catering industry, the current economic environment is declining. This issue isn’t exclusive to Macau; many other regions are also experiencing a drop in consumer spending,” Lei said in an interview with the Times.

Lei analyzed data revealing a significant outflow of consumer spending among Macau residents. During the Easter long weekend, 520,000 visitors arrived in Macau, while 516,000 local residents – including a substantial portion of the main consumer group – chose to travel outside the city.

This means that, on average, one in every four Macau residents was outside the city during the holiday.

“This has notably impacted the local economy, leading to a weakening of community consumption power,” he said. “The phenomenon of polarization is especially pronounced during weekends and short holidays.”

In the first two months of this year, another group, the United Association of Food and Beverage Merchants of Macao, conducted a survey on industry development and prospects, visiting nearly 400 businesses.

The results revealed that 79% of the surveyed businesses were located in community areas, while 21% were in tourist zones.

Notably, over half reported a year-on-year decrease in total revenue for last year, with 62% experiencing a decline compared to 2023. In contrast, only 31% reported no change, and a mere 7% noted an increase.

When analyzing by district, according to the survey findings, only 5% of businesses in tourist areas reported an increase in total revenue last year, with 34% noting no change and 61% experiencing a decline. In residential areas, 9% reported revenue increases, 29% had no change, and 62% saw declines.

Regarding business prospects for this year, many surveyed businesses conveyed a sense of pessimism, with 32% reporting a “pessimistic” outlook and 17% “very pessimistic.” In the livelihood zone, the outlooks varied: 4% felt optimistic, 28% remained neutral, and 37% expressed pessimism. Meanwhile, in the tourism zone, there was a bit more optimism, with 11% feeling “positive,” 31% “neutral,” and 26% “pessimistic.”

“The restaurant industry is unique,” Lei acknowledged.

https://macaudailytimes.com.mo/sluggish-conditions-persist-in-the-citys-catering-industry.html