The Chinese government may launch a multi-entry visa between Macau and Hengqin for Chinese tour groups as soon as next month, a source familiar with the matter told AGB.

The new tour group visa scheme may have an unexpected impact on the hotel and catering industries. This visa aims to facilitate group tours to explore Macau and stay at hotels in Hengqin. Due to significant differences in accommodation and food costs between the two sides of the border, Hengqin hotels may capture some market share from Macau hotels, as well as in the F&B sector.

An insider informed AGB that the policy may stimulate hotel prices in Hengqin. Simultaneously, it will exert pressure on the Macau hotel industry, which is already facing intensifying competition due to increasing inventory.

Currently, one-day tours remain the primary visit type in Macau, with Chinese package visitors arriving in Zhuhai one day before gathering at the border in the morning for a day visit to Macau, returning to Zhuhai at night.

However, there are still business tour groups that travel to Macau for MICE (Meetings, Incentives, Conferences, and Exhibitions) purposes. Besides participating in events at Macau venues, they may arrange group tours within the city. In this scenario, the multi-entry visa will provide more accommodation options for this group, with Hengqin hotels emerging as direct competitors.

During a plenary session of the Legislative Assembly in mid-April, Macau Chief Executive Ho Iat Seng mentioned that the multi-entry visa between Macau and Hengqin for tour groups may adopt a “group in and group out” format, requiring all tour group members to enter and exit Macau collectively.

In this context, travel itineraries may lack flexibility, as visitors may not have the option to stay at casinos longer for gambling purposes.

Another source heard by AGB mentioned that the new multi-entry visa for tour groups would only apply to 51 Chinese cities that have already implemented the Individual Visitor Scheme (IVS). This implies that after the implementation of the new visa, the targeted population will not expand.

In February of this year, the mainland Chinese government announced the expansion of the IVS to include Qingdao and Xi’an. The policy took effect on March 6th, marking the first expansion of IVS cities since 2006 and increasing the total number of IVS cities from 49 to 51.

Need for budget hotels

In August of last year, Macau mentioned the possibility of adding more budget hotels to enhance the competitive power of its tourism industry.

At that time, the Chief Executive of Macau SAR, Ho Iat Seng, acknowledged an imbalance in the proportion of star-rated hotels compared to lower-tier options.

The top official opined that there are currently too many five-star hotels and not enough three-star and four-star hotels, potentially affecting Macau’s appeal for group tourists. There are approximately 28,000 five-star hotel rooms in the city and around 15,000 rooms in three or four-star hotels. The number of five-star hotels significantly exceeds that of other room types in the market.

Most five-star hotels in the city are located in integrated resorts featuring casinos, shops, and non-gaming amusements. At that time, Lou Chi Leong, Chairman of the Macau Hoteliers & Innkeepers Association, supported the government’s idea, lauding its forward-looking nature and comprehensive vision. He considers that Macau needs to cater to high-end customers and the global middle class.

However, when Hengqin, an island with three times the space of Macau, joins the game, the market may have an immediate impact.

Currently, many international luxury hotel brands are already in or planning to enter Hengqin, with groups such as the Hyatt Regency Hotel and Hilton Garden Inn already operating for many years. Some self-branded hotels, such as Serensia Woods Hotel, Chimelong-branded Penguin Hotel, Circus Hotel, and Hengqin Bay Hotel, are also operating in the area.

The Artyzen Hotel brand, under gaming mogul Pansy Ho’s Shun Tak Group, opened the new Habitat Hengqin Zhuhai on March 28th.

Artyzen Habitat has 230 rooms and is located next to the Hengqin border, just a couple hundred of meters from the Cotai strip, where the casinos are concentrated.

The hotel offers ten room types, which will cost between RMB600 ($83) and RMB800 ($111) per night. The prices are often just half of those in Macau.

Different opinions

Speaking to AGB, Zeng Zhonglu, from the Macao Polytechnic University’s Gaming Research Team, considers that the new visa will not bring significant impacts on Macau, either positively or negatively.

The scholar points out that tour group visitors typically have “low spending power” compared to individual visitors, meaning their contribution to Macau’s economy is not particularly significant. However, he agrees with the government’s initiative to create a multi-entry visa, as it aims to extend the stay of tour group visitors in Macau. In this way, both Macau and Hengqin will benefit rather than lose out.

The Vice-president of the Cultural Heritage Tourist Guide Association of Macao, Javy Chong, told AGB that some travel agencies in Macau have already prepared packages to receive these types of tour groups despite the policy being under scrutiny by the Chinese government.

He believes that the policy will benefit the Macau tourism industry by potentially attracting more people due to the increased flexibility.

According to official data, Macau received 1.28 million inbound package tour visitors in 2023. In the first two months of 2024, the number of visitors arriving on package tours reached 278,000. However, these figures are still significantly lower than the 8.32 million inbound package tour visitors recorded in 2019.

Previously, Andy Wu, the president of the Macau Tourism Industry Association, stated that package tours would never return to pre-COVID levels, noting that mainland Chinese tourists have changed their travel patterns and now prefer to travel individually rather than in tour groups.