Macau GGR down 8% in latest week as Covid weighs: Bernstein

Macau’s weekly gross gambling revenue (GGR) is down 8 percent in the week to January 16th as China’s latest Covid outbreaks weighed on visitation, according to Bernstein channel checks.

The firm said average daily revenue was MOP244 million, down from MOP266 million in the first nine days of the month.

Bernstein said month-to-date GGR was MOP4.1 billion ($509 million), with a month-to-date ADR of MOP256 million, down 68 percent on the same week prior to the pandemic and flat compared to December 2021.

VIP average daily rolling volume is down by about 40 to 50 percent as junket operators continue to wind down in the wake of the arrest of Suncity CEO Alvin Chau late last year. Daily mass GGR was up in the high single digits from the December average, it said.

Macau had been experiencing strong visitation, which in the first 12 days was some 20 percent higher than the December average. However, restrictions have been tightened as the Omicron variant spreads across China.

Bernstein notes that China now has cases in Guangdong province, which is the largest feeder market to Macau, while Henan, Tianjin and Shaanxi also have local outbreaks. Beijing and Shanghai also reported local cases.

Macau tightened restrictions on visitors from Zhuhai, the neighbouring city on January 14th, requiring a negative test within 48 hours, as opposed to seven days previously. That was further tightened on Sunday to require visitors to have had a test within 24 hours.

Bernstein said there was a 40 percent drop in Macau/Zhuhai visitation following the first tightening and further decline is likely after the second.

It expects January GGR to be down 72 percent from 2019 levels and be down 20 percent from December. The firm warns that the prospects for the key China New Year period will depend on whether the border remains open.

Border reopening with Hong Kong, together with resumption of the electronic issuance of individual visit scheme visas and group tours will be the key catalysts for further growth in Macau, Bernstein said.

Officials in Hong Kong have been in talks with the Mainland authorities on border opening, although plans have been delayed due to a new Covid outbreak in the city. Once the border reopens with Hong Kong, that with Macau is expected to follow suit shortly afterwards.

Hong Kong has historically accounted for more than 15 percent of Macau’s GGR.