The weaker-than-expected recovery in consumption due to China’s economic headwinds is likely becoming apparent in Macau.
According to the local media outlet Allin, a company staff member claims that Macau’s leading retail group suggested all Macau staff take unpaid leave. Each employee is recommended to take at least six days of unpaid leave during the months of July and August. However, the summer period is normally the high season for tourism in Macau.
The source mentioned that although management didn’t state the recommendation is mandatory, senior management has ordered “100 percent participation” from the company’s employees in Macau.
The explanation for the decision was associated with the company’s desire to avoid layoffs, urging all staff to face the challenge together.
The decision to cut expenses is reportedly also associated with the sharp drop in the company’s business. According to the same staff member, the company’s revenue dropped by nearly 40 percent compared to last year and the pre-COVID period.
The salaries of frontline employees also encountered a significant drop of nearly 50 percent, partly due to the lower sales volume of cosmetics products since the second half of last year.
AGB has learned that the leading retail group has deep engagement with Macau’s integrated resorts located in the Cotai area, offering luxury brands, beauty products, and more.
According to the latest statistical data from the Macau government, all types of interviewed retailers registered a year-on-year decline in sales in April, with Watches, Clocks & Jewellery Retailers recording the largest decrease of 44.6 percent.
In detail, sales in department stores dropped 32.7 percent year-on-year in April, cosmetics and sanitary articles dropped 36.5 percent, and adult clothing decreased 33.5 percent from the same period last year.
Reports from local media, citing small business owners, point out that the surge of budget travelers in Macau has caused some inconvenience. In the first five months of 2024, cumulative visitor arrivals reached approximately 14.18 million, about 82 percent of the level seen in the same period in 2019. However, local retail and restaurant businesses, particularly small ones, are claiming significant drops in business.
The term “Special Forces-style Tourism,” referring to budget travelers, has recently gained popularity on China’s social media platforms. This trend among young individuals involves exploring numerous attractions and indulging in a variety of delicious cuisines while minimizing both time and expenditure.
