Gross gaming revenue (GGR) in the special administrative region (SAR) of Macau tumbled 94.5 percent to $167.8 million last month, extending a multi-month streak of declines in excess of 90 percent in the world’s largest casino center. Analysts expected a July contraction of 95 percent.
Underscoring just how bad previous months are due to the coronavirus pandemic and subsequent travel restrictions, the July figure was almost 88 percent higher than the June tally of $89.69 million. The Macau Inspection and Coordination Bureau (DICJ) released the numbers earlier Saturday.
On a year-to-date basis, Macau GGR stands at $4.38 billion as of July 31, down almost 80 percent from the same period a year earlier, according to DICJ data.
July is the first month in the third quarter and by most analysts’ commentary and estimates, the July through September period will be better for Macau concessionaires than the June quarter because the April through June stretch is likely to go down as the worst three-month time frame on record for the SAR’s gaming industry since it expanded to include foreign companies in 2002.
Signs of Life
Obviously, topping the low bar set by the June numbers isn’t difficult, but there was a clear, important catalyst for the incremental improvement in Macau last month.
On July 15, Guangdong province eliminated its 14-day quarantine policy aimed at travelers arriving from the gaming center. That’s viewed as a major boost for Macau operators because Guangdong is home to approximately 113 million residents, is the mainland province closest to Macau and accounted for roughly half of entries to the SAR last year.
More good news arrived later in the month when Beijing said it will resume issuing travel permits for mainland residents seeking entry to gaming hub for academic, business and family matters. That coupled with an entire month of Guangdong being more open could stoke an improvement in August GGR numbers.
Analysts believe that over the next several months, there will steady, perhaps biweekly updates on liberalization of travel controls, which could pave the way for more improvements in Macau’s downtrodden gaming industry.
Travel Outlook
The major hurdles of Macau’s recovery efforts remain Hong Kong and when Beijing will resume issuing individual visit scheme (IVS) permits.
After Guangdong, Hong Kong is the second-largest feeder market to Macau. The three recently tried to form a travel bubble, but those plans were scrapped following an uptick in coronavirus cases in Hong Kong. Late last month, Hong Kong extended its 14-day quarantine policy on travelers arriving from the gaming center to at least Sept. 7.
As for resumption of IVS visas, that forecast is murkier with Beijing giving no indications about the near-term fate of the program. Lacking for clues, analysts are reluctant to speculate on when IVS issuance will restart, but at least one industry executive mentioned it could happen sometime in September.
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