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The Macao Special Administrative Region (SAR) is expecting to see a strong upturn in the second half of this year, which will mend the losses inflicted on the region by SARS (severe acute respiratory syndrome).

Four cities in South China's Guangdong Province, which shares a land border with Macao, have been designated to pilot facilitated individual travel (FIT) services to Macao and Hong Kong starting on Monday.

The four cities are Foshan, Dongguan, Zhongshan and Jiangmen.

Major cities including Beijing and Shanghai are expected to be added to the four-city list before September.

Under the FIT policy, the residents of the four cities can go to Macao and Hong Kong as individual travellers. Before that, the mainland authorities only allowed package tours to the two special administrative regions.

The number of mainland visitors to Macao is expected to increase significantly under the new policy, said Joao Mannuel Costa Antunes, director of the Macao Tourist Office, on Wednesday, while receiving a 250-member delegation from tourist agencies and the media in the mainland. The delegation was the first large-scale, post-SARS tourist industry exchange between the mainland and Macao, whose mutual tourist visits have soared to 10 million annually.

The new Macao-bound travel policy could lead to a surge of 1 million in the number of mainland tourists going to Macao this year, according to the Macao Tourist Office.

Tourist arrivals in Macao hit a record 11.53 million in 2002, led by the huge influx of mainlanders. The figure represented a 12.2 per cent rise over figures for the previous year, when Macao for the first time drew more than 10 million tourists.

The boom can also be attributed to the mainland's loosening restrictions on tours mainly by allowing more travel agencies to operate such tours. So far, there are 528 tourist agencies in the mainland that have been granted licences to handle tours to Hong Kong and Macao.

Now that the mainland has become Macao's largest source of tourists, these policy changes will have a significant effect on the region's pillar industry.

The latest figures from the Macao Statistics and Census Service show that tourists from the mainland spent 2,655 patacas (US$320) per capita, which is much more than the average per capita tourist expenditure of 1,454 patacas (US$175). Based on this figure, a surge of 1 million tourists from the mainland this year could bring in over 2.5 billion patacas (US$312 million) in tourist revenues.

As soon as the severity of SARS waned in June, Macao launched a series of tourist promotion activities targeting the mainland market. Aside from the special offer of ferry tickets between Macao and Shenzhen in Guangdong, Macao's summer tourist campaign also includes a mega lucky draw, during which it will give away 10 Mercedes Benz, Gold Rolex watches and a pure gold bar.

The Macao government has approved a budget of 30 million patacas (US$3.7 million) for tourism promotion. The Macao Foundation contributed another 50 million patacas (US$6 million) to help win back customers mainly from the source markets of Hong Kong, the mainland and Taiwan.

Earlier this month, the China Travel Service (Macao), a subsidiary of the China Travel Group, merged with Macao's oldest Chinese-funded enterprise, the Nam Kwong (Group) Co Ltd, in an effort to form an alliance to reinforce its foothold in the increasingly fierce tourist market in Macao.

Antunes believes that Macao can expect the year-end count of tourist arrivals to break even last year's record.

The estimate is reasonable, since visitor arrivals from the mainland have sustained double-digit growth for the past three consecutive years, increasing by 38 per cent, 32 per cent and 41 per cent in 2000, 2001 and 2002 respectively.

And this year, the margin could become wider, shooting up by 50 per cent, according to tourism insiders.

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