Macao’s casinos are likely to be stuck in the doldrums for the immediate future, although analysts remain optimistic on the recovery of the gaming sector in 2023, despite forecasting that the industry will only get back to pre-pandemic levels in 2025.
However, estimates for the VIP gaming segment are only set to recover to 46 per cent of 2019 levels as this segment “fades away.”
In an updated report provided by brokerage Sanford C Bernstein, analysts estimated that Macao’s gross gaming revenue (GGR) this year will only reach 31 per cent of 2019 levels, which stood at MOP 292.5 billion.
This means that the city will only record an estimated MOP 91 billion in gaming revenues, about MOP 40 billion less than the government’s goal of MOP 130 billion.
Analysts predict the gradual growth in revenues will reach 59 per cent in 2022, 87 per cent in 2023, 96 per cent by 2024 and 106 per cent by 2025.
The adjusted estimates came after the recent Covid-19 outbreak in the city forced the introduction of stricter border control measures in Macao and neighbouring regions. The new cases reported at the end of September and subsequently on 4 and 5 October sent travel plans into disarray.
The city subsequently recorded a dramatic downturn in tourist arrivals during Golden Week – a holiday that is usually regarded as a major revenue boost.
Official figures showed that only 8,159 tourists visited during Golden Week, with average daily arrivals standing at 1,166, a stunning decline of 94 per cent compared to last year.
“Golden Week was completely ruined due to the border closures, and we forecast October GGR to be down nearly 80 per cent compared to 2019, but this is likely to be even worse if the border control measures with Zhuhai/China stay longer than expected,” the brokerage noted in the report.
“At this point, we expect [to see] GGR improvement in November and December, but do not expect opening up of Hong Kong or easing China visas until next spring and summer.”
With no updates yet on when Zhuhai will reopen the border with Macao, analysts say that “if no new cases are found, the maximum 14-day length of border closure could be extended until 23 October, but could open sooner.”
The past two consultations were also cancelled due to pandemic restrictions.
The consultation will be rescheduled to another date and time “as soon as possible,” according to the Gaming Inspection and Coordination Bureau.
The Secretary for Economy and Finance, Lei Wai Nong, previously announced that there are no plans to extend the consultation process because members of the public are still able to provide their opinions in writing.
The 45-day public consultation ends on 29 October.