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Transit visa price hike minimal impact on Macau: analysts

Feb 23, 2018 Newsdesk Latest News, Macau, Top of the deck  


Transit visa price hike minimal impact on Macau: analysts

A recent six-fold hike in the fee charged by Zhuhai-based travel agencies helping mainland Chinese obtain a transit visa to Macau will have “minimal impact” on the city’s tourist arrivals and gross gaming revenue (GGR), say analysts covering the city’s gaming industry.

Starting February 18, travel agencies in neighbouring Zhuhai that help mainland visitors get a visa to transit in Macau upped their fees from CNY50 (US$7.9) to CNY340, local Portuguese-language newspaper Ponto Final reported on Wednesday.

In 2014, Macau reduced to five days, from seven, the permitted stay for mainland Chinese passport holders who transit in the city. The local authorities said at the time that the move was aimed at deterring some mainlanders from deliberately circumventing the existing entry requirements to Macau.

It had been reported previously that some travel agencies would sell overseas trips that would be afterwards cancelled once the tourist entered Macau.

In a note released on Friday, Praveen Choudhary, analyst at investment bank Morgan Stanley, estimates that “about 15 to 20 percent” of all Chinese visitors enter Macau using a transit visa. There are no official numbers available for this type of document.

“The new fees of US$50 is high but not significant for average gamblers theoretical loss of US$4,000 (average mass drop per Chinese visitor),” said Mr Choudhary.

These visas are “sometimes used by more frequent visitors who may have used up their IVS [Individual Visa Scheme] annual quota,” he added.

The IVS system allows mainland Chinese living in eligible areas of the mainland to apply for a travel permit to visit Macau individually instead of having to be part of a tour group. The number of mainland cities under the IVS currently stands at 49.

There are no limits to the number of transit visas one can apply, unlike the IVS, which can only be used once every two or three months, depending on the visitor’s province of origin.

In a note also on Friday, brokerage JP Morgan Securities (Asia Pacific) Ltd said transit visas are “mainly used by hard-core gamblers (who frequent Macau more than five to six times a year) or junket agents who don’t have [a] work permit in Macau”.

Analysts DS Kim and Sean Zhuang said the hike “would do little if any to deter any gamblers,” while adding that the new fee is still “smaller than a single hand at the baccarat table”.

Both JP Morgan and Morgan Stanley stressed that the increase only covers applications made in the Gongbei and Hengqin land borders, while passengers arriving in Macau by ferry or by air are not affected.

“We also don’t think this is government policy to restrict visitation to Macau,” stated Morgan Stanley’s Mr Choudhary in Friday’s memo. “The bigger impact is for genuine overseas tourists and gamblers who may have to fly through Hong Kong instead,” he added.


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