The Macau casino market’s average daily rate of gross gaming revenue (GGR) was down about 34 percent from the daily average for May, driven by tighter travel conditions for inbound travellers from mainland China, amid a Covid-19 outbreak in Guangdong province, says a Tuesday note from brokerage Sanford C. Bernstein Ltd.
The institution said its market checks suggested that for June 1 to June 14 inclusive, average daily GGR was MOP221 million (US$27.6 million), down circa 34.4 percent on the MOP337 million daily average achieved in May.
The half-month daily performance was also about 72.2 percent down on the daily average for June 2019, i.e., in terms of year-on-year comparison to pre-pandemic trading conditions.
“The impediments to Macau travel are still largely in place,” stated analysts Vitaly Umansky, Louis Li, and Kelsey Zhu.
“Daily visitor arrivals to and departures from Macau averaged only 30,000 during June 7 to 13, which was down 26 percent versus the prior week of May 31 to June 4, and down 42 percent versus the April daily, due to the travel restrictions,” stated the Sanford Bernstein team.
Since 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.
Any easing of travel restrictions should “meaningfully increase” visitor volume from the mainland, “and more importantly, GGR,” said the brokerage.
Mainland China is the only place to have a largely quarantine-free travel bubble with Macau.
The institution observed however that any fresh Covid-19 “outbreaks could derail travel temporarily”.
Without the return of electronic issuance of Individual Visit Scheme (IVS) visas for independent travellers from the mainland, return of group visas, “Hong Kong travel opening,” and loosening of Covid-19 testing requirements for entry, “GGR remains below normal levels,” said Sanford Bernstein.
“We assume a GGR uplift to begin later this summer as travel impediments are removed and visitation increases,” added its analysts.
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”The notion that somehow the Macau gaming companies can be used by China as negotiating pawns in a geopolitical negotiation with the U.S. is definitely without merit”
Vitaly Umansky, Louis Li and Kelsey Zhu
Analysts at brokerage Sanford C. Bernstein Ltd