Posted on: September 6, 2020, 06:00h. 

Last updated on: September 6, 2020, 11:20h.

With Golden Week less than a month away, Macau operators have an opportunity to speed along recovery. Analysts view the marquee holiday as perhaps the last best hope for concessionaires there to finish 2020 on a strong note.

Macau Golden Week
Macau casinos during Golden Week 2018. The arrival of the holiday this year is pivotal to recovery hopes. (Image: AFP)

Gross gaming revenue (GGR) in the world’s largest casino center slid 94.5 percent in August, marking the fifth straight month of declines of 90 percent or more. Data suggests recent relaxation of travel restrictions paid off a bit. The city of Zhuhai started reissuing tourist visas on Aug. 12 followed by the rest of Guangdong province two weeks later. That sparked a modest uptick in visits in last month, a trend analysts see continuing with the arrival of Golden Week.

Analysts now are expecting the Golden Week holiday from Oct. 1 to Oct. 8 will encourage tourists to visit Asia’s largest gaming hub,” according to S&P Global Market Intelligence. “In the run-up to the holiday period, the Guangdong province resumed visa issuance under the individual visa program from Aug. 26. The service is expected to expand nationwide Sept. 23.”

More near-term visits are essential to the special administrative region’s (SAR) recovery hopes, because, as of Aug. 31, GGR there is down 82 percent on a year-to-date basis.

Need to Be Golden

Market observers remain pessimistic on Macau’s 2020 numbers. But things could perk up a bit in September because the SAR will get a month’s worth of impact from Guangdong issuing individual visit scheme (IVS) visas.

Home to 113 million residents, Guangdong is the mainland province closest to Macau, and accounted for almost half the visits to the gaming mecca last year, with the bulk of those tourists arriving on IVS permits. Observers say Guangdong liberalizing travel is one step in the right direction. Positive Golden Week results would be another.

During 2019 festival, Macau lured more travelers than it did throughout the three months of the second quarter this year.

The “event could accelerate the industry’s recovery in terms of revenue,” notes S&P Global. “However, the year-over-year decline is unlikely to improve due to the ongoing public health crisis in neighboring Hong Kong.”

Important Marks, Words of Caution

Some analysts believe Macau’s October GGR, which will include Golden Week, will decline 50 percent on a year-over-year basis. That sounds glum, but a 50 percent drop would be better than anything seen in the February through August period, and it puts concessionaires near the vital break even point, which they can reach at 35 percent to 45 percent of 2019 revenue.

Conversely, Macau’s rebound could be short-circuited by China’s implementation of strict money transfer protocols and a still-slack junket system that was slammed by the COVID-19 pandemic.

“The recovery pace could be dragged by a weak junket system, and sentiment amid China’s recent campaign on anti-overseas gambling activities, operational constraints post reopening on social distancing requirements, and the ability for players to move money smoothly across the border,” according to Credit Suisse.



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