Macau visitor numbers should finally start to see meaningful improvement from mid-October according to analysts, providing at least some ray of light after gross gaming revenues came in below consensus in September.
The Gaming Inspection and Coordination Bureau reported GGR of MOP$2.21 billion on Thursday, down 90.0% year-on-year and missing Bloomberg predictions of an 86% decline.
The MOP$2.21 billion figure represents an improvement over recent months – up 66% compared with August revenue of MOP$1.33 billion – but should improve further in the coming weeks on the back of more IVS visas being approved.
“With Zhuhai, Guangdong and the rest of Mainland China visa applications reopening on August 12, August 26 and September 23 respectively, daily visitation has been trending up to the mid-10,000s per day,” said Bernstein’s Vitaly Umansky, Tianjiao Yu and Kelsey Zhu in a Thursday note.
“We expect the visitation to increase over the next several months. Visa processing times in China are being done manually and are often taking over 10 days to complete (and sometimes even longer). Visitation from China should begin to rise by mid-October but Golden Week is likely to be subdued.”
Credit Suisse analysts Kenneth Fong, Lok Kan Chan and Rebecca Law said the timing of Golden Week had worked against operators in 2020 due to “the overlapping of mid-autumn festival, not enough time for IVS application, still strict travel requirements and regulatory tightening.
“From our check, the key constraints are (1) big players unwilling to come amid concern over regulatory crack down of overseas gambling and (2) per player spent has come down due to the tight control over capital flow,” they added, estimating that VIP had declined by 88% to 90% and mass gaming, including premium mass, by 90% to 92%.
For October, Bernstein predicts more substantial improvement with a decline of around 70% year-on-year pending more visa approvals and the severity of any liquidity constraints.
“October should see further recovery with visa issuances having begun in the whole Mainland China,” the analysts said. “With the visa issuance timetable now in place, we believe the drivers of recovery will be confidence levels of customers to travel and spend, opening up Hong Kong to Macau travel and an increased frequency of air transportation within Greater China to airports in Guangdong/HK/Macau.”
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