GGRAsia – Golden Week hopes sour after Macau Covid cases: analysts

Golden Week hopes sour after Macau Covid cases: analysts

Sep 27, 2021 Newsdesk Latest News, Macau, Top of the deck

Two cases of Covid-19 in Macau confirmed over the weekend – involving people infected locally – were likely to mean “bye-bye Golden Week”, said a Sunday memo from JP Morgan Securities (Asia-Pacific) Ltd.

That was a reference to so-called October Golden Week, a Chinese holiday period encompassing the country’s National Day, on October 1.

Several tourism industry insiders had last week told GGRAsia they were hopeful the festive period would bring many mainland visitors – particularly from Guangdong – to Macau.

JP Morgan Securities (Asia-Pacific) Ltd noted in a Sunday memo that Macau had gone into what the local government calls “immediate pandemic prevention” mode. In tandem, a 14-day mandatory quarantine rule had resumed on Sunday (26 September) for those entering Zhuhai from Macau – including mainlanders returning from a Macau trip – which will remain in force at least until 29 September (Wednesday), except for those working in the logistics industry, funerals sector or in medical services.

Analysts DS Kim, Amanda Cheng and Livy Lyu added: “While there’s still a possibility that travel restrictions could be lifted before/during Golden Week,” which this year runs from October 1 to October 7 inclusive, “we think it’s a foregone conclusion that it will be an ungolden holiday, as many players are likely to cancel the trips to avoid risks of being quarantined upon their return to mainland.”

Banking group Morgan Stanley said in a Sunday note on the latest Covid-19 outlook that “new cases in Macau and the mainland could mean cancellations in bookings” for Autumn Golden Week.

Morgan Stanley analysts Praveen Choudhary, Gareth Leung and Thomas Allen added: “We expect third-quarter 2021 EBITDA [earnings before interest, taxation, depreciation and amortisation],” for the Macau casino industry “to be lower than the first quarter and second quarter, and could be even negative”.

Prior to the latest outbreak, the bank’s hotel surveys had “suggested strong bookings for the October holiday compared to the May one,” said the analysts, referring to a spring holiday period including Labour Day on May 1 and known as May Golden Week.

JP Morgan noted that other measures to tackle risk linked to the latest Macau cases – alongside mass testing of the Macau population, that started on Saturday and ends on Tuesday – included the suspension of Return2hk and Come2hk, two quarantine-free travel schemes covering movement from Macau to Hong Kong, for eligible people.

The timing of the various travel restrictions “could hardly be worse, as the industry was preparing for solid pent-up demand for the upcoming Golden Week,” stated JP Morgan.

“These [restrictions] are similar to the measures in August (when Macau recorded first local cases in over a year), which led August GGR [gross gaming revenue] to be the worst print” since the start of the 2021 recovery, “despite summer holiday seasonality”, added the institution.