Brokerage Sanford C Bernstein has revised down its Macau gaming forecasts for 2021 and 2022, predicting gross gaming revenues will only reach around 59% of 2019 levels next year before exhibiting a stronger rebound from 2023 onwards.
According to a research note published Monday, Bernstein’s Vitaly Umansky, Louis Li and Kelsey Zhu estimate Macau GGR for FY21 will come in at only around 31% of 2019 GGR of MOP292.5 billion (US$36.5 billion), with the mass market segment reaching 27% of 2029 levels and VIP just 21%.
In 2022, GGR will reach 59% of 2019, with mass returning to 76% but VIP still anguishing at 31% of pre-COVID levels.
And in 2023, GGR will hit 87% on the back of mass soaring to 115% of 2019, constrained once again by VIP at 42%. Market-wide GGR is not predicted to outperform 2019 until 2025.
The reason for the slower than previously anticipated recovery has much to do with the pace of China’s reopening. Bernstein warns that, as a result of recent COVID-19 outbreaks in Macau, the SAR’s borders with Hong Kong will now likely remain closed, and eVisas under mainland China’s IVS scheme off limits, until at least the spring and possibly the summer of 2022.
“Macau’s September GGR dropped 73% from September 2019 and October will be worse due to the recent COVID outbreaks in Macau,” they write.
“Starting from September 25, the new local COVID cases have caused Macau’s temporary border closure with mainland China, which significantly disrupted the visitation and GGR in late September and more importantly, October’s Golden Week. Golden Week has been completely ruined due to the border closures, and we forecast October GGR to be down nearly 80% vs 2019, but this is likely to be even worse if the border controls measures with Zhuhai/China stay longer than expected.
“At this point, we expect GGR improvement in November/December, but do not expect the opening up of Hong Kong or easing of China visas until next spring and summer.
“Longer term, IVS e-Visa and group visa restart and Hong Kong travel resumption will be necessary to drive GGR upwards.”
In a separate note, Bernstein reported that Macau’s GGR for the first 10 days of October was down 85% compared with October 2019’s daily average, with total GGR for the period reaching just MOP$1.25 billion (US$156 million) or MOP$125 million (US$16 million) per day.