GGRAsia – Mainland China individual traveller scheme to Macau stopped

Mainland China individual traveller scheme to Macau stopped

Jan 28, 2020 Newsdesk Coronavirus Crisis, Latest News, Macau, Top of the deck

The authorities in mainland China have stopped issuing individual travel visas for visits to Macau by mainland residents, it was announced on Tuesday.

Investment analysts have previously noted that the highest-value Chinese gamblers in Macau are often holders of this form of mainland exit visa.

The suspension of such permits for independent travellers – in place until further notice – is part of a new round of measures that in aggegate have been imposed either by the national government or local authorities in Macau to try to contain the outbreak of a newly-identified coronavirus.

Individual visas to Macau previously issued by the mainland authorities remained valid, Macau government officials said in a press conference on Tuesday.

Tour groups from mainland China to Macau had already been suspended, it had been announced on Friday.

In normal trading periods, the individual visit scheme (IVS) allows mainland Chinese living in eligible areas of mainland China – typically the most economically developed places – to apply for a single-use travel permit to visit Macau or Hong Kong as independent travellers rather than as part of a tour group.

The IVS system was first implemented in four cities of the mainland’s Guangdong province, neighbouring Macau, in 2003. The aim was to support the economic recovery of Macau and Hong Kong following another coronavirus alert – the 2002-2003 severe acute respiratory syndrome (SARS) epidemic, which hurt the Hong Kong economy in particular.

Mainland China’s IVS system was expanded several times between July 2003 and January 2007. The number of cities under the IVS system currently stands at 49.

Macau welcomed a record 39.4 million visitors last year, with more than 27.9 million coming from mainland China. IVS travellers accounted for 46.8 percent of the aggregate mainland visitor arrivals to Macau in 2019, “and possibly a higher proportion of gaming revenues” at the city’s casinos for that period, wrote JP Morgan Securities (Asia Pacific) Ltd analysts DS Kim, Derek Choi and Jeremy An in a Tuesday memo commenting on the IVS suspension.

They added: “Since package tours (23 percent of Chinese visitors) had already been suspended, Chinese visitors now need to obtain other types of permits/visas to enter Macau (such as transit, business or family visas, collectively accounting for 30 percent of Chinese visitors), which could be very inconvenient for gamblers.”

The JP Morgan team said it was “frustratingly tough” to assess what effect the IVS system suspension might have on the Macau casino sector, as an important unknown was how long the ban might last.

“We wouldn’t be surprised to see the IVS suspension itself – while it lasts – hurt gross gaming revenue by over 30 percent (for both VIP and mass, though the impact should be relatively bigger for mass), and we see significant downside to February gross gaming revenue forecasts, as well as January,” the brokerage added.

Slump in CNY visitor arrivals

The coronavirus outbreak – that started in Wuhan in Hubei province in mainland China, in December – is already hurting tourism to Macau for the current Chinese New Year holiday, a period that is typically a key business period for Macau’s casino industry.

According to figures from the Macao Government Tourism Office, the tally of all visitors to the city in the first four days of the holiday period – until Monday (January 27) – was 194,521, a fall of 69.0 percent on the first four days of the prior-year holiday period.

The tally of arrivals from mainland China in the first four days this year was 111,723, a decline of 75.1 percent compared to the holidays in 2019, when the festival fell in early February. The year-on-year decline for the fourth day itself was 84.1 percent, at 36,092 arrivals.

On Tuesday the Macau government announced that civil servants in non-essential services would have their Lunar New Year holiday break extended by a further two days – i.e., until the end of Friday – which the authorities said was to reduce the risk of the coronavirus spreading. The government also called on private-sector businesses to follow suit.

Casino operators have been requested to adjust staff working schedules and commuting arrangements, so that any staff living on the other side of the border on the mainland will be able to get to and from home, following curtailment of the opening hours at the Border Gate, the main checkpoint serving Zhuhai in neighbouring Guangdong.

The checkpoint’s hours are now from 6am to 10pm, compared to the previous schedule of 6am to 1am. The local authorities say they aim is to curtail the spread of the coronavirus.

As of last week, Macau casino workers had been instructed by the local gaming regulator to wear protective facial masks while on duty. The Macau government has also issued an executive order banning from Macau casino premises anyone who has been to Hubei province within 14 days of their arrival in Macau.

Starting from Thursday (January 30) the number of daily ferry services between Macau and Hong Kong also will be reduced, with some routes suspended, it was announced on Tuesday.

There were seven confirmed cases of coronavirus in Macau as of Tuesday, all involving visitors from Wuhan. As of Tuesday, China’s National Health Commission had said there were 4,515 confirmed cases, within the country, and that death toll stood at 106.