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China – Macau’s September GGR ‘weaker than expected’ but showing green shoots

By - 2 October 2020

Whilst monthly revenue from Macau’s casino was 90 per cent down on last year’s figures to MOP2.21bn (US$277m), the green shots were there with a 66.2 per cent improvement from August’s figures.

Overall, GGR for the year is down 82.5 per cent.

Brokerage firm Sanford C. Bernstein said the year-on-year performance was ‘weaker than expected’ due to a ‘soft ramp’ in terms of visitation.

Bernstein analysts Vitaly Umansky, Tianjiao Yu and Kelsey Zhu said: “With Zhuhai, Guangdong and the rest of Mainland China visa applications reopening on August 12, August 26 and September 23 respectively, daily visitation has been trending up to the mid-10,000s per day.”

“We expect the visitation to increase over the next several months. Visa processing times in China are being done manually and are often taking over 10 days to complete (and sometimes even longer). Visitation from China should begin to rise by mid-October but Golden Week is likely to be subdued.”
Bernstein expects October’s GGR to be around 70 per cent down year-on-year.

“October should see further recovery with visa issuances having begun in the whole Mainland China,” the analysts added. “With the visa issuance timetable now in place, we believe the drivers of recovery will be confidence levels of customers to travel and spend, opening up Hong Kong to Macau travel and an increased frequency of air transportation within Greater China to airports in Guangdong/HK/Macau.”

Credit Suisse analysts Kenneth Fong, Lok Kan Chan and Rebecca Law, said ‘the overlapping of mid-autumn festival, not enough time for IVS application, still strict travel requirements and regulatory tightening’ all effected the month’s revenue.

“From our check, the key constraints are big players unwilling to come amid concern over regulatory crack down of overseas gambling and per player spent has come down due to the tight control over capital flow.”

Chief Executive of Macau, Ho Iat Seng, said: “The e-visa for the Individual Visit Scheme (IVS) has only just resumed on the mainland. Recently, visitor arrivals in Macau have reached around 18,000 and I hope it can be over 20,000 during Golden Week. But it’s still a low level compared with last year. We are discussing with the National Health Commission about the conditions for gradually releasing preventive measures.”

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