Recent outbreaks of COVID-19 in popular Chinese travel destinations are likely to further impact tourist sentiment and provide further headwinds to Macau’s short-term recovery prospects, according to brokerage Sanford C Bernstein.
In their weekly Macau GGR update – which saw daily GGR grow 9% week-on-week to MOP$86 million (US$11 million) for the seven days to 21 August – Bernstein analysts noted that recovery continues to be slow because it remains constrained by various travel restrictions in China. Players are therefore still cautious on travel in fear of governments suddenly imposing lockdown orders, like they did in Sanya earlier this month when all transport in and out of the city was suddenly ceased.
“The recent regional COVID outbreaks in China are largely in the top travel destinations [such as] Hainan, Tibet and Xinjiang, which will hurt near term sentiment for travel,” said analysts Vitaly Umansky, Louis Li and Shirley Yang.
Bernstein’s channel checks indicate that month-to-date GGR through 21 August was MOP$1.4 billion (US$173 million) with average daily revenue (ADR) of MOP$67 million (US$8 million). This was 91% lower than August 2019 ADR and 53% down on August 2021, although 419% higher than July when Macau recorded its lowest monthly GGR result since liberalization.
“GGR is still constrained by travel restrictions and the city’s COVID measures, but has seen week-on-week recovery after border reopening with China,” the analysts said.
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