\nOct. 8 (Bloomberg) \u2014 As Hong Kong protesters were blocking roads and forcing shops to close, a record number of Chinese tourists were occupying the streets of Macau.<\/p>\n
\tMore than 845,000 mainland Chinese tourists have poured into the world\u2019s largest gambling center since the China National Day holidays known as Golden Week began Oct. 1, with growth accelerating to 17 percent over last year. The surge came as the Occupy Central pro-democracy movement pushed Hong Kong into its worst political crisis in decades and cut its rise in holiday week visitors to 6.8 percent, compared with 18 percent last year.<\/p>\n
\t\u201cOccupy Central has boosted the retail market and brought more mainland Chinese to Macau,\u201d said Lei Kuok Keong, who plans casino trips for high-rollers and is also vice chairman of the Macau Gaming Industry Frontline Workers union. \u201cSome Hong Kong people who wanted to avoid the protests also came to Macau. That has helped boost the visitor numbers to casinos.\u201d<\/p>\n
\tThat\u2019s been a dose of relief for the former Portuguese colony, which is experiencing its worst slump in casino revenue in five years. President Xi Jinping\u2019s nationwide graft crackdown has squeezed high-stakes gamblers, who account for more than 60 percent revenue in China\u2019s only enclave of legal gambling.<\/p>\n
\tMacau casino stocks fell today amid a broader drop in Asian markets. Sands China Ltd. fell 2.5 percent to close at HK$42.15 in Hong Kong, while MGM China Holdings Ltd. and Galaxy Entertainment Group Ltd. dropped 3.2 percent and 2.7 percent. Wynn Macau Ltd. lost 2.1 percent, Melco Crown Entertainment Ltd. 2.5 percent and SJM Holdings Ltd. 1.6 percent. The benchmark Hang Seng Index was down 0.7 percent.<\/p>\n
\tMass Market<\/p>\n
\tCasino operators are shifting their focus to China\u2019s growing middle class. That means catering to couples, families and gamblers who bet thousands of yuan instead of millions, a \u201cmass-market\u201d strategy adopted long ago in Las Vegas. The trick has been drawing enough people to make up for the drop in high-rollers.<\/p>\n
\tTake Jerry and Joycelyn Lu, who arrived in Macau from the eastern city of Nanjing with their two young children Saturday. The family expected to spend at least 30,000 yuan ($4,900), including a stay at the Sheraton and 8,800 yuan for a Tissot watch. Jerry Lu said he would only spend about 1,000 yuan in the casinos, a sum he had already lost.<\/p>\n
\t\u201cWe are not very keen on gambling,\u201d he said. \u201cWe would prefer to spend our money on dining and shopping.\u201d<\/p>\n
\tRevenue Decline<\/p>\n
\tThe average daily revenue of Macau casinos was down an estimated 33 percent year on year during Golden Week, Cameron McKnight, a senior gaming analyst for Wells Fargo Advisors LLC, said in a note yesterday. McKnight said fewer high-stakes players were visiting casinos.<\/p>\n
\tSands China had almost 1.5 million visitors at its properties in the first six days of the holiday, an increase of 9 percent for the same period last year. That\u2019s the same number of visitors that it attracted in the entire seven-day break last year, when it recorded a 23 percent rise.<\/p>\n
\tLuxury Shops<\/p>\n
\tDuring a visit to four Macau casinos Oct. 6, tables with lower minimum bets had more gamblers than those with higher ones. Customers were scarce in the luxury shops at the Wynn Macau, with a few customers browsing Louis Vuitton bags and Jaeger-LeCoultre watches.<\/p>\n
\tSimilarly, the economy section of a Shun Tak ferry from Hong Kong was almost full while about two-thirds of the more expensive superclass seats were empty. Macau is located about 60 kilometers (40 miles) west of Hong Kong, roughly an hour\u2019s journey by ferry.<\/p>\n
\tThis year, more than five times as many Golden Week visitors arrived in Macau directly from the mainland. That may help explain why the gaming hub\u2019s traffic soared while Hong Kong\u2019s fell.<\/p>\n
\t\u201cMacau has gradually become a tourism destination of its own because it offers shopping, dining and entertainment experiences, such as boxing, concerts and gambling,\u201d Victor Yip, a Hong Kong-based analyst at UOB-Kay Hian Ltd., said yesterday by phone. \u201cI would expect Macau to benefit from some travelers who avoided Hong Kong.\u201d<\/p>\n
\tJewelry Sales<\/p>\n
\tAs major Hong Kong retail chains reported declines in holiday sales of as much as 50 percent, shops have fared better in Macau.<\/p>\n
\tChow Sang Sang Holdings International Ltd. saw sales at its five Macau jewelry stores rise more than 10 percent, with more than 90 percent of customers hailing from the mainland.<\/p>\n
\t\u201cShoppers in Macau were more willing to spend compared to those in Hong Kong,\u201d Dennis Lau, director of sales operations for Chow Sang Sang Jewellery Group, said by phone today. \u201cOur Macau sales increase may be partly due to tourists avoiding Hong Kong amid protests.\u201d<\/p>\n
\tFor some tourists, like Zhao, a businessman from the southeastern city of Xiamen, Macau offers something Hong Kong can\u2019t match: casinos. He said he plans to spend more than 50,000 yuan eating Portuguese food, getting massages and gambling at places like SJM Holdings Ltd.\u2019s Grand Lisboa.<\/p>\n
\t\u201cThe protests don\u2019t affect me at all,\u201d said Zhao, who would give only his surname. \u201cI have no plans to visit Hong Kong anyway.\u201d<\/p>\n
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