Macau’s casino stocks are seeing a rebound, after the territory eliminated entry restrictions on Sunday, allowing for testing-free travel between the SAR and China, Hong Kong and Taiwan and eliminating quarantine for all entrants.
The opening up of both China and Macau saw strong increases in visitation demand, with China’s domestic travel market expected to recover to over 70 percent of pre-pandemic figures, according to China’s official tourism ministry.
The Sunday reopening saw casino stocks for 4.7 percent hike in Wynn Macau’s casino stock on Monday, closing at HK$9.61. Meanwhile Galaxy Entertainment rose 4.2 percent and Sands China stock rose 3.7 percent.
Melco saw a strong increase, up 8.89 percent in Monday trading, while fellow local operator SJM was up 3.42 percent. MGM was the lowest gainer during the day, up 3.14 percent.
The rise comes as JP Morgan notes that gross gaming revenues during the first eight days of the year, including one day of the opening up of the SAR on Sunday, reached $261 million, the highest weekly amount since February 2022 and reaching 30 percent of pre-pandemic levels in 2019.
The daily rate of $32.3 million in GGR during the period was double that recorded on average in the fourth quarter of last year, as well as the full-year results.
Estimates are that VIP play contributed between 10 and 15 percent of the daily GGR results.
Regarding the upcoming Chinese New Year holiday, starting January 22nd, the analysts note that mass demand could reach over 50 percent of the CNY period in 2019, with the group estimating that Macau hotels will likely be sold-out during the holiday.
Mass GGR during the first week of the year reached up to 50 percent of pre-COVID levels, according to analysts.
The firm had previously revised up its 1Q23 earnings expectations for Macau, noting that a ‘full recovery’, returning to 2019 levels, could occur sometime in the second half of the year, much earlier than the predicted mid-2024 recovery.
The opening up of Macau bodes well for the city, which was hard-hit by COVID restrictions and lockdowns during the year, resulting in its lowest GGR on record for 2022, at just $5.26 billion, a yearly drop of 51.4 percent. December GGR figures reached just $432.74 million, a 56.3 percent yearly drop, despite being a 16 percent monthly improvement.