Tougher visa rules risk harming Macau gaming: Nomura
Japanese brokerage Nomura, citing Chinese-language media, gives details on what is likely to be in a Macau government report to Beijing on possible “adjustment and improvement” of an inbound visa scheme covering travellers from the mainland.
Earlier this month, Macau media – quoting a senior Macau official – said the report was likely to be with Beijing “before May”.
According to Nomura analysts Stella Xing and Harry Curtis, the key points in the report include: “1) balance between tourism capacity and local resident life quality, 2) potential free arrival and departure in Macau and Hengqin within the seven days granted by the Individual Visit Scheme (IVS), and 3) potential tightening of the IVS via four measures.”
Improving things for Macau locals might make things worse for the already under pressure gaming industry, said Nomura. The sector has already seen nine consecutive months of year-on-year gross gaming revenue decline, and is heading for a tenth in March, linked by a number of analysts to the fact many high value gamblers are staying away from the city in the wake of the mainland’s ongoing anti-corruption campaign.
“…we identified that frequent gamblers prefer to visit Macau every month for one to two weeks (and used to do this before [previous] visa tightening),” said Nomura’s note on Monday.
The brokerage adds the options for restrictions – which if adopted either in part or in whole, would be enforced on the Macau side by Macau police – include: spreading to other provinces a practice of Macau’s neighbouring province Guangdong – whereby visitors can only apply for the IVS to Macau every two months; extending the interval on Guangdong residents’ applications to once every three months; blocking approval of any new cities for the IVS, or reducing the number of existing cities covered; limiting IVS approval numbers during peak seasons.
That latter could mean, for example, “a possible delay of IVS approval near the Chinese New Year period,” said Nomura.
“Extending application interval to every two months for non-Guangdong and to every three months for Guangdong – would seriously hurt Macau’s gaming industry by further reducing the visiting frequency of frequent gamblers, who are the major revenue contributor to casinos,” wrote the analysts.
They added: “Extension of application interval, in our view, is totally beyond expectation. We don’t see a very high chance of it being passed, but if it is, we would see serious and incremental damage to Macau’s gaming industry.”
Nomura suggested that reducing the number of existing cities under the IVS would also be “difficult to pass” while controlling the IVS numbers during peak seasons looked like a “reasonable measure and easy to implement”.
Easier movement
The brokerage further stated that Wu Lisheng, a delegate to the Chinese People’s Political Consultative Conference – a key advisory body to the mainland government – had suggested that mainland residents and foreigners with valid visas for Macau should be allowed to arrive and depart with fewer immigration formalities during the period of their visa.
Macau’s neighbouring Special Administrative Region, Hong Kong, has a frequent visitor scheme where enrolled applicants can use their passport or identity card to use electronic barriers at immigration, thus helping to reduce lines of visitors at entry ports.
Macau welcomed a record 31.5 million visitors last year, with more than 21.2 million coming from mainland China, according to Macau official data. The independent travellers accounted for 45 percent of the aggregate mainland visitor arrivals to Macau in 2014.
The IVS was first implemented in four Guangdong cities and expanded several times between July 2003 and January 2007. The number of cities under the IVS currently stands at 49. The system allows mainland passport holders to visit Macau and Hong Kong as independent travellers rather than as part of a tour group.
A total of 270 million people – about a fifth of China’s population – are currently eligible to apply to visit Macau and Hong Kong under the IVS, according to Hong Kong’s Tourism Commission.
It was first reported last June that Macau and mainland officials were in talks about possible changes to the IVS, but no details were given at that time.
But in late February, Macau’s Secretary for Social Affairs and Culture Alexis Tam Chon Weng said the city was exploring the possibility of a cap on the number of mainland tourists.
Latest News
Sign up to our FREE Newsletter
(Click here for more)
