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China – Lack of ‘last minute, spontaneous’ trips slowing Macau’s recovery

By - 20 October 2020

Analytical group Union Gaming is putting back its timeline to recovery for Macau’s gaming sector after failing to see strong enough signs of an improvement in revenues.

Macau’s mass market baccarat was up to MOP$1.88bn (US$235m) in the three months to September 30 2020, marking a 77.4 per cent improvement on the quarter before.
Despite GGR across all segments improving by 53 per cent compared to the second quarter to MOP$5.08bn (US$636.1m), they were still down 92.8 per cent on the third quarter of 2019.

Analyst John DeCree said: “Currently, there’s too much friction for a large scale recovery in visitation. Although visas are available, the online/automated process is not. Travelers need to apply in person and processing times can take up to two weeks. On top of that, travelers to Macau still need to present a current (7 days) negative nucleic acid test. This makes last minute, spontaneous, or frequent trips impractical. Macau authorities are considering extending the validity of a negative test to 14 days, which should be moderately helpful.”

Mr. DeCree added that liquidity and VIP junket business remain a problem for Macau’s casinos. The first 18 days of October generated an average of MOP$222m per day (US$27.8m), up 200 per cent on September’s average.

Klebanow Consulting Principal Andrew Klebanow said he remained ‘less than optimistic about Macau.’

He believes Macau’s revenue won’t return to pre-pandemic levels until there is a safe and effective vaccine, which he doesn’t see happening until sometime in 2022, with gaming revenues returning to pre-pandemic levels in 2023. He also believes the ‘retendering of concessions in 2022 may make it more cloudy in other aspects.’

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