Macau Casinos Unlikely to See Uptick in Mainland Chinese Visitors in July, Says Research Firm
Posted on: June 23, 2020, 12:59h.
Last updated on: June 23, 2020, 04:42h.
The halt on the individual visit scheme (IVS) — a vital source of visas for mainland Chinese citizens looking to enter Macau — probably won’t be lifted next month, according to brokerage house Bernstein.
Beijing initially froze IVS issuance late last year in advance of President Xi Jinping’s visit to the special administrative region (SAR) to commemorate the 20th anniversary of the handover from Portugal to China. Entering 2020, it was expected the IVS restrictions would be lifted early in the year. But then the coronavirus emerged, prompting China to keep those controls in place.
A recent flareup of COVID-19 cases in Beijing is a setback to plans to loosen IVS controls, notes Bernstein, making a return to normal issuance in July unlikely.
The outbreak in Beijing may push back the opening of the borders,” according to the research firm. “While there has been some minor loosening… border crossing restrictions to visitation are still largely in place.”
Coming off a 93.2 percent decline in gross gaming revenue (GGR) in May, Macau continues to be hamstrung by travel controls limiting entry to the gaming hub by residents of Hong Kong and mainland China, regions that combine for 91 percent of annual visits to the casino center.
In their research note, the Bernstein analysts acknowledge there’s limited information as to when IVS issuance will resume. They add it’s unlikely July will be the period in which the visa plan comes back online.
“There has been no new information on when IVS visa issuances may begin. But once they start, we expect a phased approach preceded by health certifications most likely (at this stage, while we remain hopeful, we are skeptical that IVSs will resume in July),” according to the brokerage firm.
In April, Macau officials said they planned to press Beijing to lift the IVS ban. But there hasn’t been any movement on that front. Users of those visas are often higher-end gamblers, usually qualifying as premium mass-market players or high rollers, meaning they are vital sources of revenue for the SAR’s six concessionaires.
Last week, Macau responded to the uptick in coronavirus cases in the Chinese capital by implementing a 14-day quarantine policy on travelers entering the SAR from Beijing. But this policy involves patients being monitored by the government, whereas previous quarantines were of the self variety.
Virus Risk Remains
Chinese officials moved swiftly to deal with the latest batch of COVID-19 cases in Beijing. But that situation underscores crucial points, including the lack of a vaccine to treat the virus and Macau’s vulnerability should a second wave of coronavirus sweep across China.
“If we get a new outbreak in Hong Kong or Guangdong (or Macau), the cross-border travel opening being discussed among the three areas would also certainly be delayed again,” said Bernstein.
Another round of COVID-19 cases in China and the surrounding region would almost certainly derail hopes of Macau’s gaming-dependent economy rebounding in the fourth quarter, which is the consensus view among analysts.
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