Macau casino performance during China’s autumn Golden Week holiday period was “disappointing (but expected)”, with gross gaming revenue (GGR) down by 76 percent in year-on-year terms, said a Thursday note from Sanford C. Bernstein Ltd.
October Golden Week this year incorporates the lunar-calendar based Mid-autumn Festival, as well as China’s October 1 National Day. China’s State Council designated October 1 to October 8, inclusive, as the holiday period.
The 2020 autumn Golden Week has been seen by a number of investment analysts as a key moment for gauging the likely strength of any comeback this year in casino GGR for the Macau market, after the initial disruption wrought by Covid-19.
Sanford Bernstein analysts Vitaly Umansky, Tianjiao Yu and Kelsey Zhu stated that, according to their channel checks, the first seven days of the Golden Week period generated total GGR of about MOP1.95 billion (US$246 million). That implied a daily average rate of MOP279 million, down 76 percent in year-on-year terms.
Compared with September, the Golden Week daily average rate was up by 279 percent, said Sanford Bernstein.
Visitor arrivals to Macau during the first seven days of the autumn Golden Week holiday period were down by 85.7 percent from the same period in 2019. Preliminary figures from the city’s Public Security Police – compiled by the Macao Government Tourism Office – show that between October 1 and October 7, Macau recorded 139,280 visitor arrivals.
“At this stage, we estimate [full] October to see a [GGR] decline of maybe 70 percent” from the prior-year period, wrote the Sanford Bernstein team. “This is largely tied to visa processing and visitation and severity of any liquidity constraints which remain largely uncertain.”
The analysts also said they expected the number of visitors to Macau to continue to increase over the next several months, fuelled by arrivals from mainland China. “The key will be the simplification of the visa process (currently taking up to two weeks to process), and perhaps elimination of the Covid-19 test requirement,” they added.
Since September 23, applications have been reopened across mainland China for tourism permits for trips to Macau, although analysts have suggested that for now, it is typically taking seven working days to process them.
In addition, mainland Chinese tourists wishing to enter Macau must show a certificate for a valid, negative Covid-19 test, issued in the preceding seven days before their arrival. Some Macau tourism industry leaders are lobbying the local government to relax the Covid-19 test requirement.
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"The Macau recovery continues to be disrupted by false starts, while the lack of [Chinese] public holidays for rest of the year should cap the pace of the rebound”
Andrew Lee and David Katz
Analysts at brokerage Jefferies LLC