Possible strong post- Covid-19 demand for Macau gaming services later this year might mean the city’s casino gross gaming revenue (GGR) for the whole of 2020 only falling year-on-year by circa 39 percent, despite a 60 percent decline in the first quarter. That is according to a Tuesday note from JP Morgan Securities (Asia Pacific) Ltd.
The institution said in its latest Macau research note – citing its own estimates and operator information – that 2020 full-year Macau GGR might recover to the equivalent of just under US$22.11 billion, compared to the equivalent of just under US$36.10 billion for the whole of 2019.
The institution added that 2021 might see not simply recovery relative to 2019, but actually GGR as high as the equivalent of US$37.53 billion, i.e., greater than last year. That was on the basis of a mainland-China economic recovery, and the opening of new or revamped properties in the Macau market.
“We are increasingly hopeful that travel curbs, which have been preventing any demand recovery, could start to ease from next month, as hinted at the [Macau government] 2020 Policy Address and Sands’ earnings,” wrote analysts DS Kim, Derek Choi and Jeremy An.
They were referring first to comment by Macau’s Chief Executive, Ho Iat Seng, during the local government’s statement last week of its policy intentions for the following 12 months. It mentioned that once the novel coronavirus pandemic was deemed to be under control, Macau would ask the mainland authorities to restart the Individual Visit Scheme (IVS) that enables generally higher-value independent mainland Chinese travellers to come to Macau.
JP Morgan’s second reference was to comments from Las Vegas Sands Corp’s management – about the possible timetable for Macau market recovery – following its first-quarter earnings, released last week. The United States-based group – which controls Macau operator Sands China Ltd – had been upbeat on the prospects of market reopening.
In the first quarter this year, Macau casino GGR was down 60 percent in year-on-year terms at just under MOP30.49 billion (about US$3.82 billion) amid the novel coronavirus pandemic, which started to affect the local tourism market just before Chinese New Year in late January.
In its commentary on the likely 2020 timetable for recovery, JP Morgan noted: “We suspect that: Guangdong [province] may relax the quarantine rule for the Macau SAR some time in May; transportation options (ferry, airlift, bridge) and issuance of IVS visa gradually restart from June in phases; and [there might be] full resumption of visa (IVS and package tour) by summer holiday into July/August.”
Another brokerage, Sanford C. Bernstein Ltd, said in a Monday update on Macau: “We would expect to see some form of IVS visa begin in May and continue in a phased manner with group visa issuances beginning late this summer.”
The institution said its channel checks indicated Macau’s GGR for April 1 to April 26 was approximately MOP1.2 billion, with a month-to-date average daily rate of approximately MOP45 million. It said up to that point, April average daily GGR was “-94 percent compared to April 2019”.
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