The upcoming Chinese New Year holiday is expected to be a quiet one in Macau, with officials both locally and in China urging would-be travelers to stay home to prevent the spread of the coronavirus.
“Authorities in the mainland do not want a big flow of people during the Spring Festival,” said Hoi Io Meng, deputy director of the Macau Government Tourism Office.
Local authorities concur and have canceled all the customary public festivities.
“The first priority for Macau is still preventive works against Covid-19,” Hoi said.
Advisories against travel have been issued in neighboring Guangdong province, Macau’s principal feeder market, and in cities and provinces across China, while a resurgence of the virus on the mainland has prompted the Macau government to impose a mandatory 21-day quarantine on residents of more than a dozen cities and anyone who recently has passed through them.
The resulting gloom is widespread, according to a recent report on industry news site GGRAsia.
“This advisory can but only have a dampening impact on the potential revenue performance of Macau’s gaming industry,” said Macau-based industry consultant Ben Lee.
“The junket sector is cautious, if not pessimistic, on how business will turn out during the Chinese New Year period,” said junket investor Luiz Lam.
Hoffman Ma, a Hong Kong-based investor in the Ponte 16 casino hotel, said, “It would be an exceptional performance if the business volume of the property could reach anywhere near half of pre-Covid-19 levels.”
Normally, CNY is the busiest travel period in China. Macau’s hard-pressed casinos were looking to the Year of the Ox, which commences with the new moon on February 11 and runs through the 17th, to boost a revenue recovery that’s been painfully slow in gathering steam.
Gaming revenue plummeted by 79 percent year on year in 2020 as visitation to the city fell 85 percent. Arrivals from mainland China were down 83 percent. Visitation from Hong Kong, the casinos’ second-largest revenue source, was down 88.5 percent.
“The most worrying (part),” said Lam, “is whether China will again tighten the issuance of travel visas if the virus spread worsens in the country.”
In related news, the pandemic and Chinese government policy have combined to deliver a one-two punch that may send Macau’s vaunted VIP gaming sector to the canvas for years to come.
Many expected the junket-driven top end to lead the market back to the world-leading gaming revenues it enjoyed before the Covid crisis. But as the recovery got under way in the second half of last year, VIP’s role proved disappointing. Its share of total win fell to 34.9 percent in the three months ended December 31, its lowest quarterly finish in the post-monopoly era, and analysts are now wondering about the sector’s resilience in the face of a series of constraints bearing down on it both in terms of the movement of gamblers and gambling funds out of China.
