Operator News

China – Analysts hopeful of uptick in numbers towards the end of Chinese New Year holiday period

By Phil - 16 February 2021

The President of the Macau Hotel Association, Rutger Verschuren, has said the Chinese New Year holiday period has shown signs of improvement compared to the last few months with hotel occupancy up to around 35 per cent due to special deals from the large resort operators.

The critical Chinese New Year holiday, running until February 17, has seen light traffic so far. Further data has shown that first five days of the New Year holiday period, from February 11 to 15, saw 62,984 visitors enter Macau, marking a 71.6 per cent decline from the festive period in 2020. Arrivals to Macau before the pandemic came in at around 200,000. Mainland China is the only place to currently have a quarantine-free travel bubble with Macau. Macau’s gaming revenue for the first six weeks of the year is coming in at 23 per cent less than for the same period of 2021 at around US$25m a day.

Speaking to Macau News Agency, Mr. Verschuren said: “Doing the math, counting 10,000 visitors per day, and assuming two persons per room staying for two nights, and some 38,000 rooms available, total occupancy is around 35 per cent. Adding to that local staycations, the average occupancy could be 40 to 50 per cent. This year is special as the rates across town are very affordable, designed to drive volume. Hotel restaurants also good business, thanks to locals and visitors, including the many day trippers from across the border.”

JP Morgan’s DS Kim and Derek Choi said: “The coming week should be better, for what it’s worth. As always, we believe demand will start to accelerate from Day 4 or 5 of the Spring Festive season and into the so-called ‘tail-end’ period (which lasts for 5+ days after the official holiday). We’d hope to see a meaningful uptick for the coming week’s data, but visibility remains extremely low amidst ongoing travel curbs and it wouldn’t really move the needle for investment sentiment.”

Analysts at Sanford Bernstein added: “Much will depend on what happens in the 2nd half of CNY and the rest of the month, which typically sees stronger results than prior to CNY and first few days of the holiday. Macau will continue to experience headwinds during 1H 2021, but we see a strong improvement beginning in 2H as COVID-related travel constraints begin to fall away.”