Las Vegas Sands President and COO Rob Goldstein says he doesn’t expect to see any significant benefit for the company’s Macau resorts until the resurrection of the Individual Visit Scheme (IVS) opens the door for more mainland Chinese visitors.
Neighboring Guangdong Province removed border restrictions between the two jurisdictions on 15 July, allowing Guangdong residents or anyone to have spent at least two weeks in the province to enter Macau, pending a negative COVID-19 virus test and “green” health code.
However IVS, which China cancelled on 28 January to slow the spread of coronavirus, remains suspended.
Asked about the impact on Sands China’s gaming revenues since border restrictions were eased last week, Goldstein suggested minimal expected benefit with little chance of the company’s Macau operations reaching breakeven EBITDA until IVS is reinstated.
“We believe Macau is our biggest upside potential but it is critical to realise that without the IVS scheme being resurrected there is not much hope for casinos to come back,” he said. “Visitation right now is 2,000 or 3,000 daily.
“There are three steps [on the road back] and we took the first of those three steps with the quarantine being taken away, the second step will be the IVS resurrection, that’s critical, and then finally beyond Guangdong we need to see the other provinces open as well.
“So it’s not really that impactful financially, to the income in Macau, having the quarantine disappear without the resurrection of the IVS.
“All that is [currently] left is non-expired IVS and those are dwindling, so the impact is negligible.
“We are very excited about Macau’s potential when IVS does happen. We are strong believers in the pent-up demand theory and that our business will come back well, the problem is I can’t give you a date that is certain. It could be next month, could be later in the fall, so we remain patient and wait for that day.”
LVS Chairman and CEO Sheldon Adelson noted the Macau SAR Government “knows that the IVS scheme is important and we need it, so we’re also hopeful that will take place sooner rather than later. There is no guarantee, but it’s our hope.”