GGRAsia – China visa easing to be EBITDA boost for Macau ops: JPM

China visa easing to be EBITDA boost for Macau ops: JPM

Oct 31, 2022 Newsdesk Latest News, Macau, Top of the deck

The Chinese government’s Monday announcement about the return from Tuesday (November 1) of electronic applications for mainlanders seeking a visa for Macau was a “significant step toward Macau’s normalisation,” said a Monday note from analyst DS Kim of JP Morgan Securities (Asia Pacific) Ltd.

He stated the institution was “sanguine on gradual yet meaningful recovery from December, possibly to the level allowing the industry to print positive EBITDA [earnings before interest, taxation, depreciation and amortisation], i.e., about 35 percent of pre-Covid mass gross gaming revenue (GGR)”.

“We think the resumption greatly alleviates the frictions for a Macau trip, i.e., no need to pre-book an application slot, no need to get interviewed, no need to wait seven-plus days to get visa approved,” the analyst noted.

Though Mr Kim acknowledged there were still “multiple testing requirements” for travellers in terms of proof of freedom from Covid-19 infection. He added that “overall travel sentiment” within the Chinese mainland was still “very downbeat amid Covid-19 resurgence; we are under no illusion that Macau GGR will suddenly snap-back on the e-visa resumption.

The Macau government affirmed in a Monday statement welcoming the National Tourism Administration’s announcement, that resumption of electronic visa requests applied to applications submitted from anywhere in the country, and that the phased portion of the freshly-eased measures would apply to group tours.

The tour trade is expecting groups from neighbouring Guangdong province first, then package tours for group travellers coming from the provinces of Zhejiang, Jiangsu, Fujian, and Shanghai municipality.

“The central government’s resuming of the e-visa applications for mainland China residents to visit Macau and the Macau-bound package tours from the ‘four provinces and one city’ are important drivers for Macau’s economic recovery,” said the Macau government statement.