The Covid-19 outbreak in Beijing reported two weeks ago by Chinese state media could “push back” the loosening of the travel restrictions currently depressing inbound tourism to Macau, says a Monday note from brokerage Sanford C. Bernstein Ltd.
The Macau government said last week all travellers that have been in Beijing in the two weeks prior to arrival in Macau would be required from June 17 to undergo a mandatory 14-day quarantine.
Sanford Bernstein said in its latest commentary it was “sceptical” that China’s Individual Visit Scheme (IVS) for outbound visas, allowing citizens in selected cities to travel to Macau and some other places, could restart by July.
“The outbreak in Beijing may push back the opening of the borders,” said the brokerage’s analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu.
Although the respective boundaries between mainland China and Macau and between Macau and Hong Kong remain open for travel, a raft of restrictions – including a 14-day quarantine requirement in Zhuhai for most mainland residents wishing to visit Macau and then return via Zhuhai; and a 14-day quarantine in each direction for travel between Macau and Hong Kong – have hugely depressed tourism numbers.
“While there has been some minor loosening… border crossing restrictions to visitation are still largely in place,” stated the brokerage.
“If we get a new outbreak in Hong Kong or Guangdong (or Macau), the cross-border travel opening being discussed among the three areas would also certainly be delayed again,” added the analysts.
“There has been no new information on when IVS visa issuances may begin, but once they start, we expect a phased approach preceded by health certifications most likely (at this stage, while we remain hopeful, we are sceptical that IVSs will resume in July),” said the brokerage.
It added there was no possibility of estimating June and July casino gross gaming revenue (GGR) for Macau without “clarity” on the timing of cross-border travel and IVS resumption. June was likely to see year-on-year GGR decline at “similar level as in April and May, down mid-90s of percent; and if border restrictions stay in place for all of July, a similar outcome in that month is most likely,” said the analysts.
The institution said its channel checks indicated Macau GGR for June 1 to June 21 was approximately MOP650 million (about US$81 million) with a month-to-date average daily rate of about MOP31 million, or US$3.8 million.
“Assuming channel checks earlier in the month were accurate, June 15 to 21 average daily rate was estimated to be negative at approximately minus MOP14 million (approximately minus US$2 million), down 102 percent year-on-year,” said Sanford Bernstein.
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”The travel/border policy between mainland China and Macau will fully normalise by the end of September (i.e., before the all-important October Golden Week)”
DS Kim, Derek Choi and Jeremy An
Analysts at JP Morgan Securities