Domestic-facing APAC gaming jurisdictions can expect strong growth in 2022, with domestic visitation likely to exceed pre-pandemic levels according to ratings agency Fitch.
In a Wednesday note comparing the global gaming outlook for the years ahead, Fitch analysts rated Australia as the strongest APAC growth story in 2022 ahead of Singapore, with Malaysia and Macau lagging further behind due largely to a greater reliance on international visitation.
In-particular, the agency noted that jurisdictions with faster vaccination rollouts and “living with the coronavirus” mentalities are better placed in the short-term, as evidenced by a recent surge in gaming revenues across the United States. That spells good news for Australia and Singapore which have both opened their borders to fully vaccinated international visitors in recent months.
“Fitch expects the Australian gaming sector to rebound quickly as the country reopens following the successful vaccination rollout,” it said. “We expect domestic mass-market gaming revenue to return to pre-pandemic levels and support the casinos’ ongoing resilience, but VIP revenues will remain muted with tightened regulations, including a junket ban.
“At the same time, the small historical contribution of VIPs to total gaming revenue will limit the impact on the casinos’ credit profiles.”
On Singapore, Fitch is estimating a recovery to 75% of 2019 levels in 2022, with the gradual border reopening likely to be the main driver of the recovery. Malaysia’s recovery will be slightly slower, it says, with domestic demand driving a rebound to 65% of pre-pandemic levels in 2022.
However, Macau will continue to look to China for recovery guidance with the mainland’s zero-COVID policy set to limit revenues.
“Local and regional COVID-19 cases will be the primary driver of [Macau] visitation and ultimate performance in 2022,” Fitch said. “To the extent travel between China and Hong Kong recovers faster than our gradual recovery assumption, Macau revenues should outperform. Operators note that pent-up demand exists and transit visas are not an impediment absent regional COVID-19 cases.
“China’s ‘zero COVID’ policy hinders Macau’s recovery relative to others that have accepted its endemic nature.”
More generally, Fitch observes that, “APAC remains challenging, specifically jurisdictions that rely on inbound Chinese visitation. A recovery for international visitation and gaming revenues will largely take place in 2023–2024 and near-term volatility will remain due to strict health codes.”