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Macau’s December Hotel Occupancy at Its Highest Since January 2020

Article by : Helen Feb 3, 2021

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Updated: Aug 10, 2022

December stats brought some good news for Macau’s hotel industry: the average occupancy rate rose to 53.1% in the last month of 2020, which is the highest since January 2020 (81%). It’s a considerable improvement on a month-to-month basis: in November, hotels and guesthouses of the enclave were only 43.9-percent full, on average.

In December 2020, 579 thousand guests stayed at Macanese hotels and guesthouses – it’s a 52.5% year-on-year decrease. Visitors from mainland China accounted for the majority of the guests (492 thousand people, or 85% of the total number of guests). While their number declined by 40% compared to December 2019, Macau’s hotels and guesthouses saw a year-on-year increase of 15.7% in the number of local guests.

Three-star hotels were doing best when it came to average occupancy in December 2020: it stood at 63.4%, while four- and five-star hotels were at 56.8% and 51.9%, respectively. Two-star hotels were still struggling with attracting enough guests, as their average occupancy was at 30.2% in the last month of 2020. Guesthouses were doing a tad better than them (33.2%).

Throughout 2020, hotels and guesthouses had their average occupancy drop to 28.6%, which is a 62.2% year-on-year drop. The number of guests also plummeted by 72.5% compared to 2019 and totaled 3.87 million people. Most of them, quite expectedly, were mainland Chinese (2.76 million visitors). However, the hotel industry still managed to finish the year a lot better than travel agencies.

According to Macau’s Statistics and Census Service, the number of package tour visitors in 2020 plummeted by 96.8% compared to the year before. Furthermore, there was a 92.9% drop in outbound residents using travel agencies’ services.

2020 was a turbulent year for the enclave’s hotel industry, to put it mildly. While the first month of last year passed with business as usual, February’s average occupancy rate dropped from 81% in January to a mere 14.8%. After bouncing a bit back to 23.2% in March, it stayed under 20% up until October. October was when Macau’s economy started showing signs of rebound: the hotel occupancy increased to 39.8% and climbed further up to 44% in November.

Gross gaming revenues followed a very similar trend in 2020: they fell obscenely low in February to MOP3.1 billion from MOP22.13 the month before, rose a bit to MOP5.26 billion in March, and then stayed below MOP2.3 billion up until October when it skyrocketed (relatively speaking) to MOP7.27 billion. December was also the second highest-grossing month of 2020 for casinos, with only the pre-pandemic January beating its revenues.

Even though there is some temptation to pop the champagne, it may be too early for that. Macau is now over-reliant on mainland Chinese to come and gamble in the enclave, with foreign tourists still not allowed to enter its territory due to the pandemic. Mainland China, however, isn’t thrilled with the capital outflow that comes with its citizens traveling ‘overseas’ to gamble.

With amendments to the Criminal Law penalizing any junket operations entering into force on March 1, VIP gambling isn’t likely to drive the racanese casino industry’s recovery. Bernstein analysts predict the VIP segment’s rebound to be a longer one than the mass-market’s: it’s expected to bounce back to the 2019 revenue levels only by 2025.

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