Escalating U.S.-China trade tension threatens Macau’s casino tourism

 Saturday, July 7, 2018 


Macau’s casino tourismThe U.S.-China trade tensions that inflated from May is threatening Macau’s tourism. The U.S. tariffs on $34 billion worth of Chinese goods kicked in on Friday, which had escalating a war of words between the world’s two largest economies into a full-blown trade conflict.



There are some high-end players have stayed away from Macau in the past two weeks, citing the fluctuations in the stock market and the looming trade war, said Andrew Lo, executive director of Suncity Group Holdings Ltd., the listed vehicle of the enclave’s biggest junket operator.



Lo said that the market conditions have more uncertainties which is included in the trade tension escalations. The High rollers are more cautious, betting less or reducing trips to Macau.




Macau is a tiny Chinese administered colony and the former Portuguese colony that gets the bulk of its visitors from mainland China.



It has seen gaming revenue dragged down in the past by sharp drops in equities and volatility in the Chinese yuan. The latest disturbance in Chinese markets risks denting Macau’s casino business if gamblers’ worries intensify.



The travel-trade caution is already surfacing in Macau’s casino data, with revenue showing two straight months of slowing growth. It is expected to maintain low double-digit gains in July.



The latest depreciation of Chinese yuan may also discourage casual gamblers, who are more price sensitive. Here the hotels, restaurants and entertainment costs in Macau are priced in Hong Kong dollars or Macau patacas, which will become more expensive when the yuan depreciates.




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