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This paper aimed to build up the theorical and conceptual understanding of future forecasting study of Macau’s GDP and Gross Gaming Revenue (GGR) by co-movement of economic indicators. Macau GDP and GGR showed co-movements with a number of time series economic indicators, including China’s exports and imports, China’s manufacturing PMI, non-manufacturing PMI, China's electricity production growth, share price of some Macau’s gaming operators, etc. These time series data can be found in statistics departments of China, Macau and Hong Kong, stock exchanges, and international organizations such as the International Monetary Fund (IMF), the World Bank, the World Trade Organization (WTO). Burns and Mitchell’s study in 1946 identified co-movements between economic indicators and being further carried out and developed leading, coincident and lagging indicators, which is essential for future econometric models and nowcasting techniques developments to study these co-movements. In particular, with the proper application of nowcasting techniques, future studies can exploit the data of leading and coincident economic indicators to forecast Macau’s GDP and GGR within an acceptable level of error. Since Macau is a “monotown,” where the gaming revenue makes a significant contribution to the economy. The forecasting of gaming revenue is crucial as it aids the gambling and tourism industries in preparing supply and provides information to policymakers to plan for the near future. This research also contributes to understand Macau’s economy by investigating its internal and external economic variables.
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Objective: As a world tourist destination, Macao is inevitably under the impact of the COVID-19 pandemic. However, the market of integrated resorts in Macao are shared by only a few casino concessionaries, together forming an oligopoly. While the firms attempted to adjust price, quantity and quality of their hotel services in response to the pandemic, they could not overlook the strategic interactions with other players in the market. Hence, this paper aims to investigate the possible impact of the pandemic on the oligopolistic strategies in the integrated resort market in Macao. Methodology: Application of a theoretical model of differentiated oligopoly to this six-firm case shows that price differences across firms depend on their quality differentiation. In order to analyze these price differences empirically, this paper collects data of hotel room rates of the integrated resorts from November, 2019 to mid-August, 2020, covering the periods before and after the outbreak of COVID-19. Originality: In the existing literature, there is a lack of studies of the oligopoly in the hospitality industry of Macao. Furthermore, the effect of COVID-19 is still ongoing, so this present paper is one of the first to perform such analysis. Results: The regression of each of the hotel price differentials on the COVID-19 dummy variable shows that COVID-19 has statistically significant impacts on almost all the price differentials. Intuitively, MGM and Wynn were in the high-price segment before and after the outbreak, while other firms switched positions in the low-price segment during the pandemic. One obvious downstream movement was by Conrad. According to the proposition derived from the theory, these imply that COVID-19 should have significant impact on the quality differentiation of the firms. Practical implications: The results are in line with the observations that the integrated resorts have rolled out staycation packages according to preferences of local residents. These quality adjustments observed in Macao’s hospitality industry currently only involved variable inputs rather than fixed inputs of production; therefore, the impact of COVID-19 should be seen as short-term effects. Keywords: Covid-19; Differentiated oligopoly; Hospitality industry; Hotel room rate; Oligopolistic market structure; Pricing strategy.