Guangdong Province, Macau’s closest neighbor in mainland China and a major feeder market for the territory’s casinos, is no longer requiring returning travelers to enter quarantine.
The order, which has been a significant obstacle to cross-border visitation since it was imposed in late March, was halted July 15. Previously, travelers returning to China through the province had to quarantine for 14 days.
Ines Chan Lou, head of Macau’s Government Information Bureau, said the change is not expected to translate into a visitor boom, at least not right away. Returnees still must show a negative Covid test result obtained from an approved institution in the previous seven days. Also, they must submit a declaration that complies with a reciprocal health code system adopted by the two governments.
And other impediments remain. For one, the Macau government is requiring that everyone who enters a casino must have their body temperature measured and must present a current negative virus test and a health declaration.
Still, gaming analysts see it as a big step toward the market’s recovery𑁋one they hope will soon be crowned with a restoration on the mainland of visas for individual travel𑁋and it has them looking for new life in the win numbers.
Guangdong generates around 30 percent or more of total Macau visitation𑁋and closer to 50 percent of visitation from the mainland𑁋and drives upwards of 35 percent of gaming revenue.
“In the near term, we believe (gaming revenue) could recover gradually to 15 percent to 25 percent of pre-COVID levels,” said Credit Suisse analysts Kenneth Fong, Lok Kan Chan and Rebecca Law.
JP Morgan’s D.S. Kim, Derek Choi and Jeremy An said they’re looking for an improvement in the range of 20 to 25 percent of 2019 levels good for MOP150 million to MOP200 million per day (US$19 million-$25 million) in the month ahead “which will be a litmus test for the size of pent-up demand, helping to set a base line for 2021 recovery.”
This will grow exponentially when the visa program known as the Individual Visit Scheme, which allowed residents of 49 mainland cities to travel outside the country independently, is restored. The central government halted it in late January when the virus hit.
“We continue to view the reopening of the IVS as the main spigot for Macau that still needs to be turned on, followed by health cooperation with Hong Kong,” Union Gaming analyst John DeCree said in a client note.
Chan said her government has not been informed so far of Guangdong’s plans for issuing the visas again.
But when it does, analysts believe gaming revenue could soar to 70 percent of pre-COVID levels in the near term𑁋80-90 percent for VIP𑁋and demand could return to normal within two to three quarters after that.
