Chinese Tourist Return and the Future of Asian Casinos
For the past several decades, rapid growth in international travel by Chinese residents has fueled the tourism and gaming industries in Asia. As with the rest of the world, this came to a grinding halt in 2020 as a result of the pandemic. However, unlike much of the rest of the world, the return of international travel by Chinese residents has been at a relative trickle, particularly until late-spring 2023, even though their demand for domestic travel has been strong. Economic pressures within China appear to be also dampening the enthusiasm for outbound travel. However, now with new visa-free travel between China and several other Asian countries being agreed to, are the high-rolling days of Chinese tourism returning, and what does it mean for Asian casinos?
When it comes to major gaming destinations in Asia, current (Macau, Singapore and Philippines) and future (Japan and Thailand), tourism levels for 2023 were approximately 70% to 75% of their pre-pandemic levels (2019). Macau as the exception, it was largely China that was the major culprit for falling well short of the 2019 benchmarks. Where pre-pandemic Chinese tourists accounted for 19% to 30% of visitors to destinations like Singapore, Thailand, the Philippines and Japan, in 2023 the Chinese tourist share was halved, or worse. That said, the recovery of tourism from China only really started in late-Spring 2023, and if we look at just the last three months of reported data (Sept-Nov or Oct-Dec, where available), relative to the same period in 2022, tourism rates out of China have all skyrocketed.[1] When we look at seemingly exponential growth rates (in the short-run), one has to wonder when (if) Chinese outbound tourism will return to pre-pandemic levels.
From a casino resort development/operations perspective, it all becomes a balancing act, as it must be recognized that preferences are evolving and the demographics of travelers will evolve. Young travelers are assumed to prefer experiential travel, cultural immersion, and outdoor activities. Gambling is still an attraction for many, but may not be the sole driver, especially as junket operations become a thing of the past. The Macau government has required non-gaming expansions as part of the new wave of licensure. In order to attract the future, young Chinese traveler, especially in an increasingly crowded Asian gaming resort landscape, facility diversification will be a must. As evidenced by places like Macau and Las Vegas, properties have swung for the fences to drive visitation with non-gaming amenities and events, with very mixed results. But at this stage of the game, you have to go big or go home.
[1] Japan Tourism Board, https://www.tourism.jp/en/tourism-database/stats/inbound/#region-courtry, Department of Statistics Singapore, https://tablebuilder.singstat.gov.sg/table/TS/M550001, Philippines Department of Tourism, http://www.tourism.gov.ph/tourism_dem_sup_pub.aspx, Macau Statistics and Census Service, https://www.dsec.gov.mo/en-US/Statistic?id=402, Thailand Ministry of Tourism and Sport, https://www.tat.or.th/en
