Macau Quarantines Hotel Following COVID-19 Outbreak as Casino Stocks Tumble
Posted on: June 21, 2022, 05:16h.
Last updated on: June 21, 2022, 12:11h.
Macau recently began to experience a new wave of COVID-19 cases. The count is rising, with the city quarantining an entire hotel and identifying a casino executive as positive for the coronavirus.
There are now at least 36 people in Macau with COVID-19. Of these, 10 are showing symptoms, while the other 26 are not, according to the city’s Communicable Disease Prevention and Control Division.
In addition, Inside Asian Gaming (IAG) reports that it confirmed that one of those is the casino executive. However, neither the individual nor the casino was named.
Shutdowns Return to Macau
Macau announced recently that it was taking measures to halt the latest outbreak, including the suspension of certain commercial activity. Casinos, however, are still operating.
If the spread continues, the Chinese SAR could revert back to its status in 2020. That year, much of the commercial activity – including casinos – closed down completely.
Macau’s Hotel Fortuna, a satellite operating under SJM Holdings’ license, is currently on lockdown because of the outbreak. IAG reports that anywhere from 500-700 people, including customers and staff, are inside.
This follows a positive COVID-19 test after Macau began sweeping tests this week. So far, Macau has tested around 340,000 people in total in the past 72 hours.
Today, in a scene out of a Hollywood horror film, police in protective clothing arrived at the property and shut it down. They sealed off the entrances to ensure no one could enter or leave. Around the same time, the hotel began receiving shipments of what the media outlet believes are food and beverage for the quarantined individuals.
Inbound Traffic Slides
Even before this outbreak, Macau was suffering from a slowdown in activity. The Statistics and Census Service (DSEC, for its Portuguese acronym) reports that the SAR received 600,748 visitors in May. This is a decrease of 1% month-on-month and by 30% compared to May of last year.
May had 358,920 single-day visitors, 8.5% lower than last year. There were 241,828 overnight visitors, which represents a drop of 49.0% from last year. The average length of stay fell by 0.7 days to 0.9 days.
Out of the 600,748 visitor arrivals total in May, 538,458 were from China. and 76,171 of these used the Individual Visit Scheme. In addition, there were 404,141 visitors from the Pearl River Delta. Of this figure, 55.0% came from Zhuhai.
The number of visitors to Macau fell 9.3% to 3,084,436 in the first five months of the year. Overnight visitors, 1,103,491, declined by 40% year-on-year, while same-day visitors, 1,980,945, increased by 27.3%. Visitors stayed an average of 1.2 days, a decrease of 0.5 days.
Casinos Operators Slide
Following the first announcement of the outbreak, Sands China Ltd, backed by Las Vegas Sands, fell as much as 8%. At the same time, Wynn Macau lost more than 7%. Since then, both partially recovered; however, they are still much lower than their six-month highs. Currently, the stocks are only slightly better than 50% of what they were in February.
A Bloomberg Intelligence index of Macau’s six major casino operators fell as much as 5%. This took their total losses so far this year to 28%.
However, more trouble is brewing. Bernstein analysts Vitaly Umansky, Louis Li, and Shirley Yang predict a weaker June because of the new COVID-19 cases. Gross gaming revenue will only be 91% of what it was in June 2019, the last good year before the pandemic.
Average daily revenue (ADR) will be 31% lower than it was last year. This is a considerable difference from the analysts’ previous forecast. Only a week ago, they expected the ADR to be 11% better than May 2022.
As a result of the new guidance, Macau could see GGR of just MOP$2.24 billion (US$277 million). The ADR may only reach MOP$75 million (US$9.4 million). The analysts leave a caveat, adding that they may revise the forecast downward if Macau implements more restrictions.
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