The further easing of border restrictions from 12 August should see the premium end of Macau’s gaming reach 40% of pre-COVID levels, while operators will likely near break-even revenues by late September assuming the resumption of the Individual Visit Scheme.
In a Thursday note, analysts from financial services firm Credit Suisse outlined their expectations for Macau’s recovery following news out of China that non-tourist visas would be extended for all of mainland China from 12 August, mirroring the most recent easing of restrictions for Guangdong Province residents on 30 July.
“With the latest non-tourism visa policy, we expect applications for the visa to gradually increase into late August and September,” said analysts Kenneth Fong and Lok Kan Chan.
“This should help the VIP and premium mass segment to recover to ~40% of pre-COVID level, implying industry ADR (average daily revenue) [from all segments] at MOP$200 million to MOP$250 million (normal ADR is MOP$750 million to MOP$800 million).
“If the IVS is further relaxed by end of Aug, it would probably hit the MOP$300 million to MOP$350 million level by end of September.
“Roughly speaking, the casino operators would be break-even at around MOP$400 million to MOP450 million level of ADR (assuming higher mix of low margin VIP revenue in the initial phase of recovery).”
Fong and Chan noted that the easing of restrictions has so far come in a clear 14-day cycle, indicating that the next easing is likely around 26 August and should “include some form of IVS reopening in certain provinces of China.”