UBS reports that Macau hotel prices for mainland China’s five-day Labor Day holiday season are 20 percent below this year’s Chinese New Year (CNY) rates but bookings are high.
In an investment memo issued a week ahead of the Labor Day break, UBS notes findings from 31 hotels tracked by the research team. Some hotels are already fully booked, and the number of reserved and sold-out hotels aligns with the reservation levels seen during Chinese New Year 2024.
The Macao Government Tourism Office (MGTO) projects an average of 130,000 inbound tourists per day during the Labor Day break, surpassing numbers from previous holidays like Cheng Ming and Easter.
However, UBS analysts indicate a decline from the 170,000 daily visitors during Chinese New Year 2024 and around 158,000 daily seen during the Labor Day break in 2019.
In a separate investment memo, HSBC notes that booking trends for the Labor Day Holiday suggest robust demand, with several hotels already fully booked from May 1st to May 5th.
HSBC’s findings are based on checks on the largest online travel agency (OTA) Trip.com.
The fully booked hotels are mainly located inside integrated resorts in Cotai, including Londoner Court and Four Seasons, Galaxy Hotel and Andaz, MGM Cotai and MGM Macau, Epic Tower and Studio City Hotel, and Grand Lisboa Macau.
According to official data from the Statistics and Census Service (DSEC), Macau had a total of 141 hotels by February-end this year. The total number of available guest rooms grew by 19.7 percent annually to 46,000. The average occupancy rate of hotels reached 85.6 percent in February, with 5-star hotels having the highest occupancy rate at 89.1 percent.
Andy Wu, the president of the Macau Tourism Industry Association, told AGB ahead of Chinese New Year that hotel occupancy rates were expected to exceed 90 percent during the holiday. However, the likelihood of significant price hikes, as seen in past holiday seasons, was low.
The lower hotel prices were attributed to the increasing hotel room inventory in Macau, with data showing a double-digit increase since 2019, adding more than 7,000 rooms and 20 hotels in the past four years.
Multi-entry visa underway
In the same investment memo, HSBC also notes that they maintain an optimistic outlook for the potential launch of a multi-entry visa arrangement between Macau and Hengqin, currently under discussion by the governments.
The multi-entry visa arrangement between Macau and Hengqin is expected to apply to tour groups, and according to statements made by the chief executive during the Legislative Assembly plenary, the policy may be announced soon.
In this context, HSBC considers that it will have a ‘positive impact gradually unfolding over a longer time frame’.
