The Macau government has announced the first confirmed case of the deadly Wuhan pneumonia virus in the SAR after a 52-year-old Chinese woman was admitted to hospital on Tuesday.
The woman, from Wuhan, arrived in Macau via the Gongbei border gate on Sunday before traveling to the New Orient Landmark Hotel, where she is reported to have spent the majority of her time before falling ill and seeking medical attention 48 hours later.
With authorities across Asia issuing travel warnings this week amid reports that 17 people have died and more than 540 diagnosed with the Wuhan virus – which is already being compared to the SARS outbreak that killed almost 1,000 people in the early 2000s – news of Macau’s first case couldn’t come at a worse time for casino operators ahead of the busy Chinese New Year holidays.
As previously reported by Inside Asian Gaming, gaming stocks have already suffered a hit this week with all six Macau casino operators seeing their share prices decline, including falls of more than 5% for all five Hong Kong-listed stocks within 24 hours on Monday.
While analysts at brokerage Sanford C Bernstein suggested this week that any long-term negative impact on Macau’s gaming industry is unlikely, they also issued a warning – before news broke of the first confirmed case of the Wuhan virus in Macau – that “should the outbreak get worse, it would likely negatively impact travel and reduce visitation to Macau, thereby impacting the gaming industry’s recovery.”
“While to date the virus impact has been more muted, any major contagion that begins to disrupt travel would be negative for Macau stocks (at least over a short term period),” said Bernstein’s Vitaly Umansky, Eunice Lee and Kelsey Zhu.
They also compared the current situation to the 2003 SARS epidemic, when visitor arrivals to Macau plummeted 34% year-on-year and GGR by 38% month-on-month in April 2003 after the World Health Organization issued a global travel advisory early that month. It was noted by the analysts, however, that GGR quickly recovered by the summer and that making comparisons to the current day was risky given “Macau was at a very different place back then” with only 11 casinos (all run by SJM) and annual visitation of 11.9 million (compared to 39.4 million in 2019).
In response to news of Macau’s first case of the Wuhan virus, JP Morgan’s DS Kim, Derek Choi and Jeremy An said “the timing is unfortunate as it’s right before the busiest period of the year, Chinese New Year. We’ll have to wait and see how this would impact gamblers’ sentiments in coming weeks and months.
“We haven’t yet heard of any major cancellation for CNY holidays for hotels/junkets, though it still remains to be seen as the peak demand only kicks in from next week (27 or 28 January).
“For the purpose of reference, GGR during CNY holiday (including tail-end VIP demand a week after) accounts for ~5% of full-year GGR (or about 3% of visitations).”
Macau’s gaming regulator, the DICJ, announced earlier this month that it would assist the city’s casino operators in purchasing additional temperature detection equipment in order to strengthen the prevention and control of infectious diseases within casinos and integrated resorts, a direct response to early reports of the Wuhan pneumonia outbreak.