Brokerage Bernstein has touted a likely opening of Hong Kong’s borders with mainland China and Macau, and an easing of visa restrictions for travel from mainland China to Macau, in 4Q22 – paving the way for a rapid recovery trajectory towards the end of the year.
The forecast by analyst Vitaly Umansky comes after Macau just recorded its weakest quarterly GGR since the September 2020 quarter, impacted by COVID-19 outbreaks in Hong Kong and on the mainland.
While weakness is tipped to carry into April, Umansky believes there will be improvement through May and June before strengthening further late in the year once China’s Communist Party National Congress is complete.
“While China’s Omicron outbreak will certainly cause soft visitation and revenues into April, we expect the outbreak to be contained and Macau to see more normal visitation in May and June, with Q3 seeing quarter-on-quarter improvement,” Umansky said.
“We expect Q4 to see the opening of Hong Kong travel with Macau and China, and the loosening of visa restrictions for travel from China into Macau.
“The Chinese Communist Party Congress will be held in late October/early November, which is a critical event as it may be an inflection point when China accelerates the ‘living with COVID’ approach.”
The brokerage is forecasting a 24% year-on-year increase in Macau’s GGR in 2022, having reported GGR of MOP$86.86 billion (US$10.82 billion) in 2021, with mass market gaming to reach 54% of 2019 levels and VIP 10%.
GGR is then expected to reach 80% of 2019 levels in 2023.
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