Macau’s April casino gross gaming revenue (GGR) might contract by as much as 95 percent, said a Monday note from a brokerage, analysing monthly performance so far.
“We estimate April may be down 93 percent to 95 percent… assuming no change in travel restrictions,” said Sanford C. Bernstein Ltd.
The institution said the average daily rate of Macau GGR for April 14 to 19 was estimated to be only about MOP25 million (about US$3.1 million), which was down 97 percent judged year-on-year.
For the first 19 days of April, Sanford Bernstein said channel checks indicated Macau GGR at MOP1 billion, a decline of 93 percent on the same month in 2019.
“We estimate VIP has been stronger than mass, with revenue driven by a very small number of players, with very low hold in VIP and significant volatility,” said analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu.
Restrictions during the pandemic crisis on cross-border travel involving Macau, Hong Kong and mainland China had been factors in Macau tourism numbers “dropping to less than a few hundred visitors per day – versus 100,000-plus in normal times,” stated the analysts.
Macau’s Chief Executive Ho Iat Seng had said on Monday after the government’s policy address for 2020 that there should be “more clarity” in 10 days – i.e., the end of April – regarding whether Macau could ease its own border restrictions. The city has had 12 consecutive days without a new report of Covid-19 infection.
Other neighbouring jurisdictions including mainland China’s Guangdong province have their own travel rules relating to the coronavirus crisis.
Sanford Bernstein said on Monday: “The gaming operators and other Macau-based contacts we have spoken with do not see any definitive clarity on timing of recovery,” including “visa situation improvement”.
They added: “We expect GGR to pick up again in May/June with loosening travel restrictions, but any strong near-term recovery is unlikely.”
Brokerage Nomura had said last week it might be 2022 before Macau GGR reached 2019 levels. JP Morgan Securities (Asia Pacific) Ltd said in a Monday memo: “We think it’s reasonable to expect 2021 earnings before interest, taxation, depreciation and amortisation to be similar to that of 2019.”
On Monday Macau’s leader Mr Ho had outlined public policy steps to help the Macau economy recover from the shock of the pandemic. They included Macau asking China’s central government to increase the number of mainland cities covered by the Individual Visit Scheme (IVS), once the Covid-19 pandemic was controlled.
Mainland China’s IVS system was introduced in 2003. It allows mainland Chinese living in eligible areas of the mainland to apply for a travel permit to visit Macau or Hong Kong individually instead of having to be part of a tour group.
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”Our own consensus is that any newcomers to this [junket] sector should be corporatised, and should be financially sound and able to commit a higher guarantee deposit”
Kwok Chi Chung
President of junket trade body, the Macau Association of Gaming and Entertainment Promoters