Golden week a wash, but what’s the impact on Macau’s recovery?

Macau mass testing
Mass testing in Macau

Macau’s latest Covid outbreak has ended any hope for a Golden Week boost to revenue, while the fallout from the government’s pandemic measures may deter visitation for some months to come. 

The government has mass tested its entire population three times in two months, placed six areas of the city into lockdown and a further 11 under so-called “yellow zone” restrictions.

The ever-tightening and changing measures for anyone entering or leaving the Special Administrative Region, such as the mandatory testing requirements, coupled with the potential for quarantine on return are likely to prove significant deterrents to travel.

From Wednesday, anyone leaving Macau must present a negative nucleic acid test taken within 24 hours of departure. The neighbouring city of Zhuhai imposes 14-day quarantine on those entering, while the government has also stepped up its travel requirements for anyone arriving by air. Anyone from an at risk country, which includes The Philippines and Cambodia, will need to be fully vaccinated and present three negative NATs, as well as undergoing lengthy isolation. 

“Every time this happens the level of anxiety about being caught in Macau and unable to return without quarantine rises,” said Ben Lee, managing partner of iGamiX Management & Consulting. “You have to really, really want to come to Macau to brave all of these potential risks.”

“I think for confidence to return it’s going to take a good two months without further incidents, so we might see an end-of-year minor spike.” 

From Wednesday, most entertainment facilities will be required to close and public servants have been sent home until October 7th. The casinos have been allowed to stay open, though Lee said they are empty. 

The Macau government has won praise for its handling of the pandemic, going more than 500 days with no cases, before discovering Covid in August in a family returning from China. 

However, it has not been able to convince its population to get vaccinated, which is a key requisite to reopening the borders and for any meaningful recovery in gross gambling revenue. 

Chief Executive Ho Iat Seng has said he will not be able to start any dialogue with Chinese authorities on the resumption of group visas, or of electronic issuance of individual visit scheme visas until at least 80 percent of residents have been immunized. 

At present, only about 53 percent of the 649,300 population has been fully vaccinated, with the lowest rates being amongst the elderly and most vulnerable sectors of society.

The operators were quick to launch public awareness campaigns and offered incentives, including bonuses and extra vacation, to get their staff vaccinated. However, the drive has not spread into the wider community.

The government has stressed that its focus will remain on raising public awareness, rather than imposing restrictions on unvaccinated individuals.

“People are getting tired of the repeated mass testing and there is a growing questioning of why the government has not moved to mandate vaccines,” Lee said. 

Last month, the government did impose a test or jab policy on all public frontline workers, which required a test every seven days if they are not vaccinated. 

That has helped boost vaccination rates from 50 percent to 70 percent.

In the meantime, analysts continue to revise down their forecasts for Macau’s gross gambling revenue.

September showed a 34 percent rebound from August, but the figures were still below expectations.  

According to figures from the Gaming Inspection and Coordination Bureau, GGR was MOP5.87 billion, up from MOP2.21 billion a year earlier and MOP4.44 billion in August. The figure is 73.4 percent below September of 2019. 

Deutsche Bank, which was expecting a 70 percent decline from September 2019, has revised down its revenue estimates through to 2023.

The firm is now expecting 4Q21 GGR of $3.4 billion, down from its estimates of $3.53 billion prior to the latest DICJ figures.

For 2021, its forecast drops to $11.88 down from $12.12 billion, while for 2022 it sees GGR of $29.04 billion, down from $29.62 billion.

In 2023, the estimate is for $33.45 billion, down from $34.19 billion. This is still lower than the $36.5 billion recorded for the whole of 2019.