The relaxation of China’s Covid-related visa controls appears to be bearing fruit, with early reports indicating Macau’s five-star hotels are already at 80 percent capacity for the October 1 “Golden Week” holiday and five of them are fully booked.
The territory’s five-star hotels are mainly located within the larger resort casinos, and of the five reported to be full, four are in Cotai: the Four Seasons, operated as part of Sands China’s Venetian complex, the Morpheus at Melco International’s City of Dreams, the hotel at Melco’s Studio City and the Ritz-Carlton at Galaxy Macau. The fifth is the hotel at Galaxy’s StarWorld in Macau proper.
While gaming revenues have yet to show significant improvement, visitation does appear to be rebounding after authorities in the neighboring mainland province of Guangdong restored visas for individual tourist travel to Macau last month. A recent survey of 10 hotels in the territory show occupancy rates at upwards of 55 percent for the weekend of September 20, up from just 7 percent in July.
Visitation has been languishing since January, and gaming revenues with it, when the visas were halted as part of stringent border controls aimed at containing the spread of Covid-19. But with the visas back in force in Guangdong arrivals jumped 150 percent through the first 10 days of September compared to the same period in August and are currently averaging around 15,000 per day compared with 2,500 through July and less than 8,000 in August.
According to a Monday note from investment bank JP Morgan, gross gaming revenue over the past week reached approximately
Gaming revenue reached MOP$115 million per day (US$14.4 million) during the first week of September, three times higher than the MOP$40 million per day in July and August, though it’s fallen somewhat short of analysts’ expectations.
“The pace seems slower than what we’ve seen in other reopened jurisdictions (such as Australia, Korea or US regionals, where local demand recovered to 70-100 percent-plus of pre-COVID-19 levels in a matter of months),” said a trio of analysts with JP Morgan.
With visas for individual tourist travel slated for restoration across all of China on September 23, the “Golden Week” holiday𑁋a combination of “National Day” commemorating the founding of the People’s Republic of China and the country’s traditional Mid-Autumn Festival𑁋could be the jolt the market is waiting for. If it is, analysts say it’s possible that market-wide EBITDA could climb back to break-even in the fourth quarter.
