According to the report, the international recovery will “occur first in Macau” but border restrictions between the city and neighbouring Guangdong introduced in March were a “setback” for casino revenue “which was gaining traction in March.”
Instinet analysts Harry Curtis, Daniel Adam and Brian Dobson said: “There will likely be a recovery in 2020, but slow. Beijing is taking the risk of a second wave of infection seriously. When the IVS system (Individual Visit Scheme) is restarted, it will be into a safe and controlled environment. VIP and premium mass are probably the first to recover since there are likely to be restrictions on visitation growth which will limit mass.”
The research firm is predicting a fall in revenues of 65% in Q3 and 60% in Q4, adding that “if the reinfection rate is low” Macau could reach “US$22.6bn in GGR in 2021, roughly 62% of 2019 level.”
“To achieve this number, IVS needs to expand to larger, more distant provinces, mass and group visitors must have confidence in health screening protocols at the borders, and social distancing policies on casino floors should be relaxed, thus increasing the number of operational gaming positions during peak periods,” the analysts added. “An effective vaccine would likely be needed to exceed our 62% (of 2019 GGR) estimate.”
It believes the IVS system will restart in May, firstly in mainland China provinces “where demand will not overwhelm immigration checkpoints.”
“Larger provinces, like Guangdong and Hubei, may get segmented into northern and southern sections with visas first issued in the closest virus-free areas,” it added. By 2022, it added: “We estimate that GGR recovers to roughly 90% of 2019 highs, if borders, IVS and casino operations have returned close to normal.”
Source: GMB / G3 Newswire
