GGRAsia – Eligible PRC citizens denied entry at Macau border: Daiwa

Eligible PRC citizens denied entry at Macau border: Daiwa

Feb 10, 2015 Newsdesk Latest News, Macau, Top of the deck

Increased scrutiny of Chinese travellers at border crossings into Macau is one of several factors likely to produce weak gaming revenue in the casino city during Chinese New Year, said a note from Daiwa Securities Group Inc.

“Since the further tightening of rules on transit visas in January, crossing the border has become increasingly difficult, with some eligible travellers apparently waiting in line for over three hours before being denied entry. We expect this increased scrutiny to have an adverse impact on Macau’s frequent customers,” wrote Daiwa analysts Jamie Soo and Adrian Chan in a note on Monday.

They added that Macau sources had indicated that – unlike in previous Chinese New Year holidays – the city’s casino dealers have not been put on standby to work mandatory overtime. They think rolling chip volume for VIP play could fall by as much as 50 percent year-on-year in February, following a four-year low for rolling in January. The Daiwa team also think more junkets could close after the holidays.

“Our take on the leading indicators observed during our recent visit to Macau is that the key Lunar New Year period will be marked by poor liquidity, a decline in player quality, and a drop in frequent customers,” added Daiwa. It was referring to ease of access to credit for VIP gamblers – or to cash for mass-market players – and by “player quality” the amount they drop at the tables or slots when they get to Macau.

“Forward hotel bookings, a good leading indicator of gaming demand, have fallen. In the VIP segment, some large junket operators have reduced their forward hotel bookings by as much as 50 percent compared with 2014 October Golden Week,” said the analysts, referring to another peak holiday period in China that marks National Day.

“For the mass market, [hotel] occupancy rates are likely to remain high, albeit supported by progressive cuts to the operators’ ‘comps’ (complimentary rooms and services) policies in the run-up to the Lunar New Year. Anecdotally, the comp requirements have fallen below the level of Golden Week in October 2014, which implies to us that the quality of visitors has worsened since the last lacklustre peak season,” added the Daiwa team.