Fitch Ratings Inc says it expects Macau’s recovery in gaming tourism to pick up momentum in 2022, “after small-scale virus outbreaks across mainland [China] disrupted an otherwise steady resumption of tourism inflows in the second half of 2021”.
The institution said “travel precautions” around the Lunar New Year in early February and the Winter Olympics in Beijing, also scheduled for February, were “likely to result in subdued activity” in the first quarter next year. “But we expect the recovery to gain steam in mid-2022, underpinned by higher vaccination rates and the phased resumption of group tours and e-visa for mainland tourists,” stated the ratings agency.
The comments were part of the “Fitch Ratings 2022 Outlook: Greater China” report, published on Wednesday by analysts Andrew Fennell and George Xu.
Fitch said the Greater China region would face a “more challenging growth environment in 2022, following robust economic growth during much of 2021.”
The ratings agency forecasts economic growth in Macau at 36 percent in 2022, up from an expected 25 percent in 2021, “with the phased resumption of group package tours and e-visas for mainland China residents.” The institution’s outlook on Macau’s ‘AA’ ratings was revised to stable from negative in April 2021, given the city’s “nascent economic recovery and its resilient public and external balance sheets.”
According to Fitch, Macau will in the coming year “maintain its explicit Covid-zero policy and prioritise the return of mainland tourists.” A sustained recovery, however, “will hinge on China’s evolving policies towards cross-border travel and gaming, which could be temporarily disrupted by virus outbreaks,” it added.
The report also suggested that the “explicit alignment of public health strategies between mainland China, Hong Kong and Macau should permit the normalisation of cross-border business travel and tourism, and boost services trade.”
Currently, mainland China is the only place to have a largely quarantine-free travel arrangement with Macau. The city had 6.08-million tourist arrivals for the first ten months of this year, up 32.2 percent on the same period of 2020.
The head of the Macao Government Tourism Office, Maria Helena de Senna Fernandes, said in late November that Macau might see in 2022 “10 million” tourist visits, which would amount to a “breakthrough” in the city’s fortunes, and would in likelihood be linked to easing of travel restrictions with Hong Kong and mainland China.
In Wednesday’s report, the Fitch team stated that the gaming industry would “continue to be the growth engine” for Macau’s economy, despite its intention to “diversify its economy further through a collaboration with Guangdong province on Hengqin Island.”
Nonetheless, Macau’s key credit buffers, such as its fiscal reserve and net external creditor position, “will remain among the strongest globally,” said the Fitch report.
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Aggregate number of Covid-19 cases in the latest Macau outbreak, as of Thursday-end