GGRAsia – Macau Sept, Oct GGR recovery path uncertain: Bernstein

Macau Sept, Oct GGR recovery path uncertain: Bernstein

Sep 06, 2022 Newsdesk Latest News, Macau, Top of the deck

The recovery path for Macau’s casino gross gaming revenue (GGR) for September and October – encompassing the Mid-Autumn Festival and National Day holiday periods – “is still uncertain and largely dependent on whether China can quickly contain the regional Covid outbreaks and resume travel,” says a Monday note from brokerage Sanford C. Bernstein Ltd.

Macau daily GGR for the first four days of September had been “weak,” registering MOP88 million (US$10.9 million), wrote analysts Vitaly Umansky and Shirley Yang, citing the institution’s industry checks.

Although that was up 12 percent compared to the MOP79 million average daily rate during August 22 to 31 inclusive, the Macau casino sector’s recovery was “continuing to be constrained by various travel restrictions in China, and players remaining cautious on travel,” said the Sanford Bernstein team.

The Chinese mainland is the only place to have a largely quarantine-free travel arrangement with Macau.

But the brokerage observed that travel from that market would “continue to be constrained in the near future,” mentioning a recent ongoing lockdown in Chengdu, a city of 21 million in Sichuan province in southwest China, as well as Covid-19 cases in Shenzhen in Guangdong province, next door to Hong Kong, and in Dalian, a city in Liaoning province in northeast China.

China’s State Council has designated September 10 to 12 inclusive as the holiday period for the Mid-Autumn Festival; and October 1 to 7 inclusive for the holiday encompassing National Day on October 1. The latter is often referred to by the tourism trade as autumn “Golden Week”.

The head of a leading Macau tourism trade body recently called for an easing of the Covid-19 testing rules for visitors from mainland China, ahead of the two important holiday periods.

Sanford Bernstein also gave some commentary on the recent announcement that Macau was permitting from September 1 and on a gradual basis, inbound travel from an additional 41 countries – albeit with a seven-day quarantine, plus three days of so-called self-management of health, during which time the person’s Macau electronic health code would be ‘yellow’, meaning they could not enter certain places, including the city’s casinos.

The brokerage said that as “we do not expect this requirement will be lifted in the near future, the practical benefit” for the city’s tourism and casino markets, “is essentially nil”.