High hopes of recovery for Macau’s gaming and hospitality trade over the summer have now been dimmed, due to a local family being infected with the Delta variant of Covid-19, and the subsequent mass testing of the local population, and tightening of cross-border travel rules, said several senior figures in the sector, in comments to GGRAsia.
“We hope that the [local] Covid-19 situation can be controlled within 14 days – as the Chief Executive suggested – so that hospitality businesses here can gradually pick up starting from late August,” remarked Andy Wu Keng Kuong, president of Macau Travel Industry Council.
Mainland China is the only place to have a mostly quarantine-free travel bubble with Macau. Recently Guangdong province, the largest-single source of tourists to Macau, has advised its citizens against trips outside that jurisdiction, amid an uptick on the mainland, in Covid-19 cases described as imported from outside the country.
Authorities in the neighbouring city of Zhuhai, in Guangdong, announced late on Tuesday that starting from 6am on Wednesday, people travelling between Zhuhai and Macau would need to present a certificate issued within 12 hours of departure, showing a ‘negative’ result for Covid-19.
“Following the 12-hour rule, you can see that the number of Macau’s tourist arrivals… plunged to the level of about 1,000 a day,” remarked Mr Wu.
In a Thursday announcement, Macau’s Marine and Water Bureau said that all the ferry transport between Guangdong province and Macau had been suspended until further notice.
Mr Wu noted: “For August, we now expect that the city’s [average nightly] hotel occupancy would be less than 50 percent.”
He added that suspension of certain non-gaming facilities – some mandated by the government and some done for commercial reasons – at the city’s casino resorts – would in likelihood subdue demand for “staycation” bookings by local people.
Recovery a month away
In the “best case scenario”, Macau’s hospitality trade would need about one month to see a rebound in business, said Mr Wu. “Our reference point was based on what we saw following Guangdong’s outbreak starting from late May: it took us about a month to see a gradual recovery in tourist arrivals.”
Hoffman Ma Ho Man, an executive from one of the investors in casino hotel Ponte 16 on Macau peninsula, took a similar view.
“Overall, it is still very hard to project an optimistic picture” for Macau’s recovery, remarked Mr Ma, deputy chairman and executive director at Hong Kong-listed Success Universe Group Ltd.
He noted mainland China was still experiencing an uptick in Covid-19 infection cases.
In a Thursday note, brokerage JP Morgan Securities (Asia Pacific) Ltd said near-term trends for Macau’s gaming sector would be “undoubtedly poor”, with uncertainty on the “timing and magnitude” of Macau’s easing of travel links with neighbouring places.
“Near-term trends will be undoubtedly poor given the quasi-lockdown status of Macau, and severe travel restrictions across China. But the silver lining is that Macau’s vaccination rate is likely to accelerate as the recent flare-up significantly boosts awareness among locals…this should help bring a long-anticipated travel bubble across China-Hong Kong-Macau closer,” wrote JP Morgan’s analysts DS Kim, Derek Choi, and Livy Lyu.
As of Thursday, Macau had recorded 289,941 people vaccinated against Covid-19, and of that number, only 234,849 people have received two doses of the vaccination, according to official figures. Local health authorities have mentioned previously that this vaccination coverage is far below the city’s target for “herd immunity”.
In early July – prior to the latest crisis – Macao Government Tourism Office (MGTO) director, Maria Helena de Senna Fernandes, said her department had expected the city’s average nightly hotel-occupancy rate to be in the range of “70 percent to 80 percent” during the summer-holiday months of July and August. A local government subsidy for Macau ID holders booking local hotel stays had also been expected to boost occupancy figures, the MGTO boss had said at the time.
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