Business Maverick

Business Maverick

Macau casinos shut thousands of hotel rooms in labour crunch

Macau casinos shut thousands of hotel rooms in labour crunch
Casinos along the Cotai strip in Macau, China, on Monday, 19 December 2022.

Macau casinos have been forced to close off thousands of hotel rooms and cut back on guest services like housekeeping, as a labour shortage leaves the gambling hub struggling to cater to a surge of tourists from a newly-reopened China. 

Some five-star hotels in Macau’s casinos only have fewer than half of their rooms available for booking, people familiar with the situation told Bloomberg, asking not to be identified discussing internal business.

Another operator has about one-fifth of its rooms out of commission, according to Billy Song, president of the Macau Responsible Gaming Association. The lack of service staff is so severe that some hotels have reduced the frequency of maid services, cleaning rooms only after customers check out, he added. 

While casino companies hope their hotels will be back operating near capacity by the important summer season, Song said, Macau’s slow hiring process for foreign workers is a key hurdle to fully reopening now that Covid border curbs and restrictions are over. 

“We didn’t expect the reopening would come so fast, so everybody’s struck unprepared,” Song said in an interview. “After three dismal years, we all want to make the best out of this year. But now that customers have come, we don’t have enough capacity to receive them.”

Capturing the initial wave of tourists is crucial for the recovery of Macau, which ceded its crown as the world’s biggest gambling hub to Las Vegas during the pandemic as China shuttered its borders. The labour shortage is triggering room rate inflation and a drop in the quality of hospitality, both of which could deter visitors from the city. 

It could also further strain casino operators, which saw a combined loss of $1.6-billion during the pandemic. A crackdown on high-rollers and their agents has already scuppered Macau’s VIP industry, which contributed half of the city’s gambling revenue before Covid. Casinos are also facing tighter government control after an overhaul of local gaming laws gave authorities increased oversight of their operations, including overall performance and major financial decisions.

A Bloomberg gauge of Macau’s six casino operators fell 2.1% in Hong Kong Thursday morning, compared with a 0.2% increase of the benchmark Hang Seng Index. 

Urgent needs

Most Macau casino jobs — including dealers, floor managers and accountants — are reserved for locals. The most urgent manpower needs are front-facing staff like waiters, cleaners and receptionists at hotels and restaurants, Song said. Those jobs were largely filled by non-local workers before Covid — many of them from mainland China and Southeast Asia — because Macau locals prefer less menial roles, he said.  

Many of those workers were either let go or left their posts during Covid, when Macau shut its borders alongside Hong Kong and suffered a tourist drought amid China’s lockdowns and travel curbs. 

More than 44,000 non-local employees have left Macau since early 2020, leaving a gaping hole in the workforce even as China ending its Covid Zero policy fuels a travel boom not seen since 2019. The gaming hub relies on the mainland and Hong Kong for over 90% of its tourists.

Part of the holdup is the initial need for government-approved quotas for non-local workers, which can lag as authorities ensure there aren’t any suitable local candidates. Even after securing those quotas, hiring is slow, according to the people familiar. 

Gone elsewhere

Casino recruitment agents have found that many former employees from China returned there and are now working in cities over the border, the people said. Workers from Southeast Asia that used to make up a sizable chunk of the hotel and casino workforce have headed to countries like Singapore and Vietnam where gaming and tourism is booming, according to Song. 

Macau’s Labour Affairs Bureau didn’t respond to a request for comment. 

As a result, hotel prices are quickly picking up. In February, Macau’s average hotel room price was 1,206 patacas ($149) — already 80% of pre-Covid levels — while visitation was only 45% of what it was in 2019, according to data from the Macau Government Tourism Office. 

Since China’s reopening, pent-up travel demand among mainland tourists has led gaming revenue to surge from pandemic lows. Still, while March revenue jumped to its highest in three years, it was only about half of the pre-pandemic level. And without enough hotel capacity, casinos could find it difficult to sustain the pace of a rebound. 

On Weibo, one of China’s largest social media platforms, users are complaining about the skyrocketing rates — and poor services — at Macau hotels, and opting to travel elsewhere. 

“Macau’s hotels are too expensive, plane tickets to Singapore, Malaysia, Thailand and Japan are too expensive, so I eventually booked a ticket to Korea,” said one user who’s planning to travel at the end of this month. 

“The services at my hotel were way worse than before Covid,” said another user, who visited Macau in late March. “Maybe they haven’t been completely prepared for the reopening.” BM/DM

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