Customer inflow to remain low after casino operation re-start – Brokerage

Analysts at Sanford C. Bernstein predict that customer numbers will remain low after the 15-day suspension imposed by the Macau government finishes after midnight February 20.

‘Even with the casinos reopening, there will still be a dearth of customers. We currently estimate that hotel occupancy in Macau is ~10 per cent-15 per cent, with some customers staying over since Chinese New Year. However, the suspension of group travel and IVS visa issuance eliminates the largest source of customers,’ the brokerage said in a note.

‘Until the suspensions are lifted, most mainland Chinese customers will not be able to enter Macau. There is no clarity at this time from China, when such travel may begin to be permitted. Visitation is only a mere trickle out of mainland China’.

Meanwhile, airline connections with other destinations have been significantly reduced, while ferries connecting Hong Kong and Macau are also not running with residents in the neighbouring SAR also no exactly looking to travel to Macau at this time.

Bernstein maintains that the first quarter of this year will see some ‘awful results’, and even considering that ‘soft business’ resumes in late February and March, gross gaming revenues will still likely decline by 50 per cent year-on-year.

However, the brokerage also expected Macau to see a good recovery in the second half of the year as the contagion is brought under control and travel into Macau resuming, and if China’s customer confidence doesn’t falter.