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Macau Oct GGR to be only 20pct of pre-pandemic: Bernstein

Macau casino gross gaming revenue (GGR) for October is likely to be “down nearly 80 percent” compared to the same month in 2019, i.e., pre-pandemic trading, says a Monday note from brokerage Sanford C. Bernstein Ltd.

The institution also updated its overall 2021 GGR forecast, in the light of recent Covid-19 cases in Macau, saying it expected GGR for the 12 months to be “69 percent below 2019”, but up 51 percent compared to 2020.

For October GGR in particular,  the result “is likely to be even worse” than an 80-percent contraction on 2019, “if the border control measures with Zhuhai/[mainland] China stay longer than expected,” added analysts Vitaly Umansky, Louis Li and Kelsey Zhu.

They were referring to a number of tightening measures applied to outbound travel from Macau, following recently-confirmed Covid-19 cases in the city.

The measures – including compulsory quarantine for travel from Macau to neighbouring Zhuhai in Guangdong province; and more recently compulsory quarantine for travel from Macau to Beijing – have been identified by investment analysts as major disincentives for mainland tourists to come to Macau in the first place, and major hurdles for the recovery of the city’s casino industry.

October Golden Week – a mainland holiday period that this year ran from October 1 to 7 inclusive, and that before the new Covid-19 cases in Macau had promised to bring in many tourists to the city – had been “completely ruined” by the travel tightening measures, said Sanford Bernstein in its Monday memo.

The daily average of visitors to Macau during this year’s October Golden Week was down 93.7 percent on the daily average even of 2020, according to data issued on Friday by Macau’s Public Security Police. The decline coincided with new cases of Covid-19 confirmed in Macau just before the holiday, and also during it.

Sanford Bernstein said on Monday: “We expect GGR improvement in November/December, but do not expect opening up of Hong Kong or easing of China visas until next spring and summer.”

The reference to Hong Kong was to the possibility of quarantine-free travel in both directions between Hong Kong and Macau. Before the pandemic, Hong Kong visitors were estimated by a number of investment analysts to have contributed a significant portion of tourism to Macau and of annual GGR.

In July, Sanford Bernstein suggested that pre Covid-19, Hong Kong had delivered 20 percent of Macau’s visitors, and 15 to 20 percent of GGR.

In its Monday note, the institution said its research suggested that the Individual Visit Scheme (IVS) exit visas from the mainland that are currently the main method for mainland tourists to come to Macau, were still being issued under a “manual, interview-led process which takes a few days to up to one week-plus”. Though Sanford Bernstein added that the “time lag has improved somewhat from earlier this year”.

Its memo said that IVS arrivals even outside Macau’s Covid-19 alert periods were “still running at only approximately 20 percent of normal largely due to the cumbersome in-person visa issuance process”. It was therefore “critical to have IVS to shift back to e-visa issuance”.

The brokerage added it was “also important for China to resume group visa issuance and allow group travel to Macau,” which it said had accounted for “50 percent” of mainland visitor volume in 2019.


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