Macau officials said last week there is still no confirmed date for the easing of border restrictions with mainland China.
The closures, which have cut the city’s casino industry adrift from its main source of players, have been devastating for Macau’s tourism-driven economy, but the government said nothing will change until key details regarding health and safety have been finalized with officials on the mainland.
Macau has largely been sealed off from the mainland since late January, when the central government stopped issuing visas for group travel outside the country and most forms of individual travel in order to contain the spread of the Covid-19 virus, which was first detected in December in and around the populous south-central city of Wuhan. The virus has infected at least 82,000 people in the country and resulted in more than 4,600 deaths, though it appears to have been brought under control there.
Macau is the most densely populated city in the world, home to more than 600,000 people in an area of around 10 square miles. Yet it’s recorded only 45 cases of the disease, and no confirmed cases in the last month, clearly indicating there’s been nothing like the community spread that’s devastated the U.S. and other Western countries. This is despite the city’s proximity to China and the fact that prior to the pandemic it was hosting around 150,000 tourists a day.
Officials attribute their success to strict border controls—currently all outsiders are barred save for residents of China, Hong Kong and Taiwan as well as effective screening and quarantining of those who do enter.
Not surprisingly, visitation has slowed to a trickle, and the cost to the tourism-dependent casino industry has been severe. Gaming revenues were down more than 85 percent year on year in March and more than 90 percent in April 60 percent through in all through the first quarter and experts aren’t forecasting much relief until visa restrictions are meaningfully eased.
That said, pent-up demand is estimated to be massive, and optimism is on the rise about the industry’s eventual recovery. JP Morgan Securities (Asia) now believes gaming revenue will decline by around 39 percent for all of 2020, a much more moderate fall-off than analysts were expecting a few weeks ago.
And while it’s still a big number should it prove accurate it will amount to a decline of around US$14 billion from last year’s world-leading $36.1 billion the JP Morgan group said it’s possible 2021 could see a return to positive growth.
