An easing by the end of this year of remaining “major travel curbs” linked to Covid-19, that have been affecting the Macau casino market, could see the city’s casino gross gaming revenue (GGR) return to “normal” – i.e., pre-crisis – levels by roughly the third quarter next year, says JP Morgan Securities (Asia Pacific) Ltd.
It said GGR of MOP281.3 billion (US$35.2 billion) might be achievable for full-year 2021, compared to the MOP291.2 billion achieved in full-year 2019, before the global health crisis took hold.
The institution said its “base case” for recovery was that travel visas for mainland China residents to visit Macau – issued either under the Individual Visit Scheme (IVS) and/or for package tours - could be reinstated for those coming from neighbouring Guangdong province “in a few weeks”.
A return of IVS visas had been mentioned by Macau junket sector representatives in comments to GGRAsia – and by other investment analysts – as a key element in Macau’s casino market recovery.
Easing of travel via Guangdong should be followed by “gradual expansion” of a so-called travel “bubble,” and “visa resumption” for other mainland provinces “in phases from September into year-end,” said JP Morgan analysts DS Kim, Derek Choi and Jeremy An.
Under a tentative travel bubble move that took effect on July 15, people wishing to journey to Guangdong from Macau, via the city’s land borders with Zhuhai, are no longer required to undergo a 14-day quarantine on the Guangdong side.
JP Morgan acknowledged that its latest recovery timeline was probably “more optimistic” than the view of most investors, given the number of recovery dates for Macau gaming that have been suggested and then missed, since the global crisis began at the turn of the year.
But the institution said it took comfort from the fact that the question of any travel easing between mainland China and the country’s other Special Administrative Region (SAR), Hong Kong – recently the scene of a spike in new infections – seemed to have been uncoupled from what happens between the mainland and Macau.
“As Macau is now being segregated from the Hong Kong SAR for travel scheme and health-code sharing with China, a successful trial of the bubble would make it easier for the central government to further ease policies for Macau (which has been Covid-19-free for months),” wrote the JP Morgan team.
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