Even though the casinos in Macau were open the entire month of April, gaming revenue declined 96.8 percent for the month, largely due to border restrictions that have required any visitors to Macau to self-isolate for 14 days. The casinos took in only US$95 million in April versus almost US$3 billion in April 2019.
Macau casinos closed for two weeks in late January and early February in response to the virus, but revenues have not returned. January revenues dipped 11 percent from the previous year, February was down 88 percent and March 80 percent.
In a report to investors entitled “Is This The Sound of Hitting Bottom?,” Jefferies’ analysts blamed the visa restrictions on the decline, but said that the bad revenue report may not be so bad, says the news “could draw a neutral response from the market as hopes/expectations grow for visa restrictions easing some time in May, as indicated by operators’ commentary. The most important near-term catalyst, in our view, would be the Chinese government relaxing the Guangdong 14-day quarantine.” Guangdong experienced its first three-day spread without reports of any new virus victim last week.
Visitation to Macau shrunk by almost 94 percent year on year in March as Covid-19 restrictions continue to isolate the world’s largest casino market from its mainland China tourism base.
Not surprisingly, the number of mainland visitors, the principal source of gaming revenue for the territory’s 39 casinos, was down 96.3 percent to 88,890.
As these numbers show it has been virtually impossible for most mainland residents to enter Macau, a situation that has prevailed since late January, when the central government suspended visas for individual and group travel outside the country.
There’s been no official word to date on plans for relaxing the restrictions, which have been effective in limiting the spread of the potentially deadly contagion in conjunction with Macau’s mandatory quarantines, the local government’s swift action to temporarily close the casinos back in February and a ban on foreign entrants from outside China, Hong Kong and Taiwan. The number of known local cases of the virus was less than 50 as of last week, with no fatalities and no new cases reported in the previous 21 days.
But with most of the local economy dependent on gaming-driven tourism it’s come at an enormous price. Gaming revenue, the source of 80 percent of the government’s annual tax haul, plunged 60 percent year on year in the first quarter, and revenue growth in April was expected to be near zero.
Visitation does appear to be improving, however. The official count of 212,311 visitors in March was 36 percent better than February’s, when the 39 casinos were closed for two weeks. But it remains a far cry from 2019’s average of 108,000 visitors a day.
On the plus side, the average length of stay for the month was up from 1.8 days to 3.0 days, due in part to the difficulty of cross-border travel. Likewise, overnight visits increased from 2.5 days to 4.7 days.
