Macau government officials have not yet shared their thoughts on the retendering of gaming concessions in the Chinese territory, or if the process will be affected by the Covid-19 pandemic.
On May 17, Secretary for Economy and Finance Lei Wai Nong attended a meeting of the Legislative Assembly to hear lawmakers’ opinions. Afterwards, he told reporters the government isn’t prepared to talk about the incumbents’ standing, the number of licenses to be issued in a new tender, and other matters of interest. The original 20-year gaming concessions are due to expire in June 2022.
“The public consultation will start in the second half of this year,” Lei said. “We expressed our views collected from the society about this topic and hope the government will consider our views when making the consultation document as well as launching the retendering process.”
One casino boss says concessions should remain in place for another year, to allow the industry to more fully recover from interruptions caused by the Covid outbreak. Ambrose So Shu Fai (l.), vice chairman and CEO of SJM Holdings Ltd., told the Hong Kong Economic Journal the government should extend the term of the existing six gaming concessions for “at least one year” and revisit the matter then.
In So’s view, the extension would allow operators to “recover financially” from the impact of the coronavirus while “not affecting Macau’s economy.” It would also give Macau “more time” to decide on the criteria for the new public tender, he said.
So also said it would be “unfair” to overseas bidders if the local government started a new public tender process, for the simple reason that current travel restrictions might prevent their representatives from coming to the city.
“If eventually the competition is only for the existing gaming concessions… this runs against the very aim of the rebid,” So said.
Melinda Chan Mei Yi, a former Macau lawmaker and now executive director at Macau Legend Development Ltd., agrees. She told local media it would be “difficult” for the government to complete the necessary public hearings and wrap up the retender process in just over a year.
Meanwhile, Moody’s Investors Service expects Macau to fully recover from the pandemic by 2024, with tourism operators seeing a return to pre-pandemic levels as early as 2023.
“The ensuing economic upturn is likely to track the recovery in tourist arrivals, since relaxations of travel restrictions with China will result in an upturn in gaming revenues as pent-up demand returns,” Moody’s reported, adding that it will take longer for the SAR to reduce its reliance on gaming, a stated goal of the local and Beijing governments.
“Such efforts have followed a three-pronged strategy of moving from high-end (VIP) gaming to mass-market gaming, from gaming tourism to nongaming tourism, and on improving the growth of the financial sector,” Moody’s said.
“Prior to the pandemic, these efforts were bearing fruit. However, the magnitude and global nature of the coronavirus shock has made it difficult for Macau to prove the benefits of still-nascent economic diversification efforts.”
As of the end of April, according to Macau Business, tourism authorities had distributed 3.62 million cash vouchers in Mainland China as a way to improve visitor numbers. A total of 1.96 million hotel coupons were distributed with 350,812 room nights redeemed. The average daily volume of visitor arrivals rose from 18,000 in January to 26,600 in April, and the average hotel occupancy rate went from 41 percent to 60.1 percent in that period.
To encourage more tourism, the SAR government has launched a series of initiatives including the “Stay, Dine and See Macao” project, joint promotions for tourism and meetings and promotional events under the “Macao Week” brand.