The economic impact of a global pandemic on the tourism economy: the case of COVID-19 and Macao's destination- and gambling-dependent economy

Availability of full-year economic data is indicative of an opportune time to compare and contrast predicted and actual economic impact. In this regard, this study delineates the impact of the COVID-19 pandemic on the gambling industry using Macao, the world's largest destination-dependent gambling hub, as a case. Using a series of quantitative analysis (ARIMA, correlation, and regression) on longitudinal data, the findings reveal that the revenue of the Macao gambling industry is significantly dependent on tourist arrivals, and that the industry is evidenced - using predicted and actual values - to experience an unprecedented decline in revenue as a result of plummeting tourist arrivals. The findings also indicate that Macao is a gambling-dependent economy as the decline in gambling revenue coincides with the decline in economic indicators such as GDP, median salary, and unemployment rate. This article concludes with pragmatic suggestions (e.g. reimagine strategies, seek virtual alternatives) to help gambling hubs that are destination-dependent to navigate in and recover from crisis such as the COVID-19 pandemic.

Automated summary

The study revealed that the revenue of Macao's gambling industry is heavily reliant on tourist arrivals, and the drastic decrease in tourist numbers due to the COVID-19 pandemic led to a significant decline in gambling revenue, as well as a drop in economic indicators such as GDP, median salary, and unemployment rate. The article concludes with practical suggestions to help destination-dependent gambling hubs navigate through and recover from crises like the COVID-19 pandemic.