Guangdong and Fujian, two Chinese provinces that combined supply in normal trading times possibly a quarter-plus of Macau’s gross gaming revenue (GGR), appear to be recovering fastest from Covid-19 lockdown, says a Wednesday report from brokerage Sanford C. Bernstein and Co LLC.
The report cites the GGR contribution of the two places based on casino operator information, research by Nielsen Corp, and the brokerage’s proprietary analysis and estimates.
Data indicated that the general recovery of economic activity in “Fujian, especially the southern city of Xiamen, and Guangdong (China’s most populous province at 114 million) has been among the fastest,” in mainland China wrote the Sanford Bernstein team.
A number of brokerages has speculated that tourism to Macau – stymied in the past months by a raft of travel restrictions across China and Asia Pacific in order to limit the spread of the novel coronavirus, might start in phases, beginning with visits from the mainland.
Next door to Macau on Hengqin island (pictured in a file photo) – a piece of mainland territory touted by the mainland authorities as a non-gaming tourism centre to complement Macau – the Chimelong International Ocean Resort is to reopen on Thursday (April 30) to coincide with the lead up to China’s Labour Day holiday. The country’s State Council has designated May 1 to 5 as the vacation period for this year.
According to reports, Chimelong’s relaunch will be on a limited-capacity basis; no more than 30-percent of the normal. Indoor attractions will remain closed, and some of the shows at the theme park will also not be available.
Mainlanders wishing to visit Chimelong – a 14-day quarantine still applies for Macau residents wishing to enter Guangdong – will require advance online registration and online booking of entry tickets. Upon entry to Chimelong, visitors will need to make a declaration on the state of their health, and undergo temperature checks.
Subsidies, virus-free days
Separately it was reported by mainland media that an aggregate of CNY60-million (US$8.5 million) in subsidies will be offered by the Hengqin authorities to stimulate tourism over the Labour Day break. About CNY20 million will be in the form of consumer coupons, and CNY40 million will go either to tour-facility providers or visitors.
Hong Kong’s Centre for Health Protection announced that as of 4pm on Tuesday, no new confirmed Covid-19 cases had been recorded in that city for three days in a row, leaving the number of confirmed cases in Hong Kong at 1,037 so far. Macau has not had a new case for 20 days.
“If the situation remains under control, we expect Macau will gradually begin to lift travel restrictions in the latter part of May or June,” suggested Sanford Bernstein in its Wednesday report.
Not all steps locally are in the direction of easier movement. Hong Kong announced on Tuesday that a 14-day quarantine applicable to “certain persons” had been extended until June 7.
Under the relevant regulation “all persons arriving from the mainland, Macau or Taiwan (or having stayed in the mainland, Macau or Taiwan) in the past 14 days prior to arrival to Hong Kong” are subject to compulsory quarantine.
Possible strong post- Covid-19 demand for Macau gaming services later this year might mean the city’s GGR for the whole of 2020 only falling year-on-year by circa 39 percent, despite a 60-percent decline in the first quarter. That is according to a Tuesday note from JP Morgan Securities (Asia Pacific) Ltd.
Sanford Bernstein stated in its assessment of Macau’s recovery outlook: “While GGR estimates by customer origin are just that, estimates, we do have good visitation data for Macau.”
The institution added that in 2019, 45 percent of visits to Macau by mainland Chinese were by people based in Guangdong. It stated that of Guangdong residents’ 12.7 million visits to Macau in 2019, 72 percent involved use of Individual Visit Scheme (IVS) visas, for better-off independent travellers.
Sanford Bernstein said as much as 30 percent of Macau mass GGR and about 15 percent of VIP GGR might come from Guangdong players. “In mass, unrated play has a higher proportion of GGR coming from Guangdong and more of a skew to properties on the peninsula versus properties on Cotai,” suggested the brokerage.
Macau’s Chief Executive Ho Iat Seng said last week that once Covid-19 was deemed under control, the city would ask mainland China to restart the IVS programme and expand it to cover new feeder cities there.
“Guangdong residents have a somewhat higher propensity to gamble than those in other parts of the China,” Sanford Bernstein asserted in its report on the outlook for recovery.
“While it is difficult to show the data, one place we can see some evidence is in China lottery sales. As evidenced by lottery sales, Guangdong is a key lottery market comprising 10 percent of China’s overall lottery sales (with 8 percent of the population),” stated Sanford Bernstein.
(Updated 3.42pm, April 29)
Oct 22, 2021Starting from the stroke of midnight on October 24 (Sunday), travellers arriving in China’s capital Beijing from Macau are no longer required to undergo a 14-day period of “centralised medical...
”Our own consensus is that any newcomers to this [junket] sector should be corporatised, and should be financially sound and able to commit a higher guarantee deposit”
Kwok Chi Chung
President of junket trade body, the Macau Association of Gaming and Entertainment Promoters