Macau Still Waiting on IVS Benefit to Materialize, August GGR Likely Bleak
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Earlier this month, the city of Zhuhai in Guangdong province started reissuing tourist visas, a move widely expected to lift the fortunes of Macau’s ailing gaming industry, but there’s yet to be much positive impact from that decision.
As such, analysts are reiterating the view that recovery in the world’s largest gaming hub will take time while forecasting another dismal month of gross gaming revenue (GGR) figures in August.
While Zhuhai has started visa issuances, there is no impact on Macau gaming yet and, as a result, the wait goes on,” said a team of Bernstein analysts in a recent note.
The brokerage firm is predicting GGR will tumble 94 percent this month, adding to multi-month streak of declines in excess of 90 percent. That after July GGR plunged 94.5 percent in the special administrative region (SAR), though that was better than the 95 percent retrenchment forecast by analysts.
Patiently Waiting
Zhuhai resumed issuing individual visit scheme (IVS) visas on Aug. 12. Given its status as the only the mainland China city connected to Macau by land, it was viewed as pivotal that Zhuhai signed off on individual travelers and tour groups returning to the casino center without being subject to quarantine protocols upon their return.
The rest of Guangdong province soon followed suit. That region is slated to start issuing IVS permits tomorrow with the rest of mainland China doing the same on Sept. 23. A primary reason why it’s going to take time for these actions to benefit Macau is, well, time. Reports indicate it’s taking authorities a week or more to approve new travel permits for Zhuhai residents.
“The wait on IVS visa applications is approximately seven to 10 days, as automated visa issuance system is not yet active, and applicants have to go through the application process in person (for now),” according to Bernstein.
Compounding Macau’s woes is that the border with Zhuhai was closed last for a period last Thursday because Typhoon Higos passed over the casino center.
Some Green Shoots
It’s not all glum news in Macau. In fact, resumption of Zhuhai IVS issuance confirms that as more regions join the party, the gaming mecca could see a massive influx of visitors.
The SAR averaged 5,600 daily visitors from Aug. 1 through Aug. 12, but that figured jumped to 7,700 last week.
“Since Zhuhai tourism visa resumed on August 12, there has seen some pickup, but not an obvious recovery” in Macau’s visitor numbers or GGR, said the Bernstein analysts.
With the rest of Guangdong province rejoining the IVS party tomorrow, Macau visitation and GGR numbers could start to see material improvement by mid-September. Month-to-date, as of Aug. 23, Macau’s gaming turnover tally is around $119, notes Bernstein. The daily rate is on pace to be 95 percent lower on a year-over-year basis and five percent below July’s figure.
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