Macau’s average daily gross gaming revenue (GGR) was about MOP250 million (US$31.2 million) during the first five days of September, marking a recovery in demand from the previous month, suggested respectively brokerages JP Morgan Securities (Asia Pacific) Ltd and Sanford C. Bernstein Ltd in their Monday memos.
Macau’s estimated GGR for September 1 to September 5 was “respectable”, despite that month not being usually a high-demand period even in pre-pandemic times, indicated JP Morgan. Both institutions said the market was anticipating a boost in visitor numbers and demand in October, coinciding with so-called Autumn Golden Week, a holiday period in China encompassing National Day, on October 1.
JP Morgan noted that the estimate for the first five days of September indicated GGR was tracking at about 34 percent of the demand seen for September 2019, i.e., the most recent pre-pandemic comparison for that month.
The early-September GGR was also below the MOP272 million achieved per day in July, when the market showed signs of recovery, prior to an early-August Covid-19 alert in Macau that saw rules tightened on inbound travel from the mainland.
For September 1 to 5, JP Morgan estimated mass gambling recovered to about 35 percent to 40 percent of pre-Covid-19 levels relative to September 2019, and VIP to about 25 percent of pre-pandemic numbers.
That compared to about 45 percent recovery for mass and 20 percent recovery for VIP relative to 2019, during the second quarter, wrote JP Morgan analysts DS Kim, Amanda Cheng, and Livy Lyu.
Only recently have the Macau authorities eased travel conditions for visitors coming by either land, sea, or air from mainland China. Currently, mainland China remains the only place to have a largely quarantine-free travel arrangement with Macau.
To date, several districts and communities across an aggregate of five provinces and one city on the mainland, remain on Macau’s quarantine list. The places are in: Jiangsu province, Henan province, Hubei province, Yunnan province, Shanghai city, as well as several streets in Guangzhou city of Guangdong province.
JP Morgan said: “We conservatively modelled September GGR to be MOP6 billion to MOP7 billion – or MOP200 million to MOP230 million per day -, followed by a strong recovery in October,” that was likely to be a “post-pandemic high,” at approximately MOP11 billion for the month, or MOP350 million per day.
The country’s State Council has designated the first seven days of October for this year’s Autumn Golden Week.
In its Monday note, the Bernstein team suggested that Macau would only see GGR improvement “beginning in the fourth quarter”, i.e., from October.
“The current Covid-19 situation in China and Macau is under control, but any new local cases may still curtail” visitor volume in the near term, wrote Sanford Bernstein analysts Vitaly Umansky, Louis Li, and Kelsey Zhu.
“More significant” improvements in travel conditions “are not likely until next year,” said the brokerage.
“Longer term, IVS [individual visit scheme] eVisa, and group visa restart, and Hong Kong travel resumption will be necessary to drive GGR upwards,” wrote Sanford Bernstein.
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