Global financial services provider and credit ratings agency UBS has revised its estimate for Macau’s gross gaming revenue (GGR), projecting a bigger decline in revenue for the world’s biggest gaming destination this year due to COVID-19 lockdowns.
In its latest note to clients, UBS projected a decline of 44 per cent in GGR for Macau this year. The projected decline is deeper than the credit agency’s previous forecast a 31 per cent decline in GGR for the world’s leading gaming destination which remained closed for more than a couple of months this year due to deadly corona virus pandemic.
UBS analyst Robin Farley said that the credits agency decided to lower its estimate for Macau’s gross gaming revenue due to slower visitor recovery on the island known for attracting gaming enthusiasts from all around the world. Farley explained that the firm expected a partial resumption of the popular Individual Visit Scheme (IVS) from July in Guangdong, later than its May expectation earlier.
The IVS is an important and popular travel permit used by inhabitants of mainland China to enter Macau. It is worth-mentioning here that many of mainland China citizens are considered premium mass players in Macau. But, Beijing suspended the concerned visa scheme late last year in advance of President Xi Jinping’s visit to the peninsula. The halt was to be lifted early this year but the corona virus outbreak subsequently forced authorities to extend the suspension.
Last month, Macau suffered a whopping decline of 93.2 per cent in GGR as travel restrictions kept visitors away from the widely popular gaming destination. Dealing another blow to Macau’s gaming recovery, Hong Kong recently extended travel controls to July 7, 2020. Hong Kong also declared a 14-day quarantine procedure for anyone visiting from Macau. It is also worth-mentioning here that Mainland China, Taiwan and Hong Kong collectively account for 99 per cent visitors to Macau.
Commenting on the situation, Farley said, “Guangdong, Macau, and Hong Kong have discussed allowing cross-border travels with mutually recognized health-monitoring measures, so the potential convenience of that would be a positive for Macau gaming, though timing is unclear.”
However, industry experts say that there are some indicators that Macau’s gaming figures will likely bounce back later this year as the number of VIP gamers remained almost steady and the combination of travel restrictions and nonexistence of corona virus vaccine will keep Chinese gamers away from other destinations, such as Singapore and Las Vegas, which will benefit Macau.