In 2023, the hotel industry in Macau experienced a dramatic recovery, transitioning from a period of financial losses to achieving a notable profit of MOP$8.18 billion (US$1.02 billion). This impressive turnaround was driven by a substantial 140% increase in revenue, which reached MOP$37.93 billion (US$4.72 billion). The resurgence was largely attributed to a significant rise in guest numbers and improved occupancy rates across hotels in the region.
Surge in Revenue
The surge in revenue was driven by substantial growth across various segments of the hotel industry. Room revenue emerged as the largest contributor, totaling MOP$18.37 billion (US$2.28 billion). This marked a substantial 240% increase compared to the previous year, reflecting a robust demand for hotel accommodations.
Food and beverage services also saw impressive growth, with revenue reaching MOP$8.14 billion (US$1.01 billion), an increase of 180% year-on-year. This growth underscores the rising importance and popularity of dining experiences within hotels.
Additionally, rental venue revenue amounted to MOP$8.07 billion (US$1 billion), marking a 40% increase from the previous year. This increase highlights a resurgence in demand for event spaces and conference facilities, signaling a return to pre-pandemic levels of activity.
Rising Expenses
Despite the notable increase in revenue, the hotel industry also faced higher expenses. Total expenses for the year increased by 41% year-on-year, reaching MOP$29.75 billion (US$3.69 billion). The breakdown of expenses included operating costs of MOP$14.2 billion (US$1.77 billion), which encompass the day-to-day operational expenses of hotels.
Staff expenses were another significant component, totaling MOP$12.14 billion (US$1.51 billion). This reflects the crucial role of human resources in maintaining hotel operations and guest satisfaction.
In addition, purchases and commissions accounted for MOP$3.41 billion, representing costs related to procurement and commission payments, which also contributed to the overall increase in expenses.
Performance Across Hotel Classes
The financial performance of hotels varied significantly across different star ratings, with all categories showing substantial improvement. Five-star hotels experienced the most dramatic revenue increase, more than doubling their earnings compared to the previous year. This indicates a strong recovery in the luxury segment of the market.
Four-star hotels also saw a significant boost, with their revenue increasing by nearly 70%. This growth reflects a solid performance within this segment, highlighting its continued appeal to both domestic and international travelers.
Three-star hotels enjoyed a revenue increase of more than double, similar to the performance of five-star hotels. This growth indicates a strong rebound in mid-range accommodations.
Two-star hotels, in particular, saw their revenue more than triple, demonstrating the most dramatic recovery among all hotel categories.
All hotel classes recorded profits in 2023. Five-star hotels achieved a combined profit of MOP$5.88 billion (US$730 million), while four-star hotels posted a profit of MOP$1.13 billion (US$140 million). Three-star hotels generated a profit of MOP$1.06 billion (US$130 million), and two-star hotels contributed a profit of MOP$100 million (US$12.43 million).
Economic Contribution
The significant recovery of the hotel industry had a notable impact on Macau’s economy. The gross value added (GVA) by the hotel sector surged by 300% year-on-year, reaching MOP$20.35 billion (US$2.53 billion). This increase highlights the vital role that the hotel industry plays in the economic landscape of Macau, underscoring its importance as a key driver of economic growth.
The financial results of Macau’s hotel industry in 2023 illustrate a remarkable turnaround from previous losses, characterized by substantial increases in both revenue and profitability. The broad-based recovery across various hotel segments, driven by higher guest numbers and improved occupancy rates, reflects a significant rebound. As the industry continues to recover, it is well-positioned to further contribute to the economic vitality of Macau in the years ahead.