GGRAsia – Guangdong Covid-19 cases hinder Macau GGR: Bernstein

Guangdong Covid-19 cases hinder Macau GGR: Bernstein

Jun 08, 2021 Newsdesk Latest News, Macau, Top of the deck

Macau’s casino gross gaming revenue (GGR) in the first week of June was down 26 percent week-on-week, with average daily revenue (ADR) of about MOP225 million (US$28.2 million), says a Monday note from brokerage Sanford C. Bernstein Ltd.

The past week ADR “was also down nearly 33 percent” versus the average in May, as new Covid-19 cases in neighbouring Guangdong province clouds GGR growth prospects, wrote analysts Vitaly Umansky, Louis Li, and Kelsey Zhu.

The Macau government has announced stricter measures for entry to the city, regarding people that have been in certain areas of Guangzhou and Foshan, in neighbouring Guangdong province. The reason is newly-reported cases of Covid-19 infection there.

The Macau health authorities announced a mandatory 14-day quarantine for people who had been in either of or any of the districts of Haizhu, Liwan, Nansha, Panyu or Yuexiu in Guangzhou; or in the Nanhai and Chancheng districts of Foshan, within 14 days of their intended arrival in Macau.

Starting from 10am today (June 8), people intending to enter Macau from Guangdong must hold a nucleic acid test certificate – issued within 48 hours – proving they are ‘negative’ for Covid-19 infection.

Guangdong province has been the largest-single source of Macau’s inbound mainland Chinese tourists in recent months, according to official data.

“The situation in Guangdong (the largest feeder market) has worsened,” said the Sanford Bernstein team, adding that it “may lead to further decline in visitation and GGR in June” in the Macau market.

The tightened health checks for travel between Guangdong province and Macau are expected to dent mainland-consumer demand for Macau tourism services including hotel accommodation, the president of Macau Travel Industry Council, Andy Wu Keng Kuong, told GGRAsia.

In Monday’s memo, the Sanford Bernstein team said that due to the surge of Covid-19 cases in Guangdong, the brokerage was not forecasting June GGR “to be down circa 70 percent” compared to June 2019, and down “about 30 percent” from May this year.

“Macau will continue to experience headwind during the first half of 2021, but we see GGR improvement beginning in the second half as Covid-related travel constraints begin to fall away,” stated the analysts.