HK-Macau travel arrangement with a 3,000 initial quota and segregated gaming areas – Brokerage

A future Hong Kong-Macau travel scheme could include a 3,000 initial quota for travellers coming from the neighbouring SAR and segregated gaming areas, analysts from brokerage Sanford C. Bernstein indicated in a recent report.

Macau and Hong Kong authorities have given hints of launching a possible quarantine-free travel scheme with restrictions as soon as mid-July but with the exact data and conditions yet to be determined.

In a report dedicated to the possible new travel arrangements, Bernstein indicates that the daily quota for Hong Kong visitors could be limited to 3,000 during the initial phase of reopening, with the system to already be limited to fully vaccinated people, which currently represent 25 per cent of Hong Kong’s population.

With daily visitation for the first five months of this year at 22,512, adding 3,000 Hong Kong visitors would represent a 13 per cent incremental daily visitation to Macau.

A special Blue Health Code will be only issued to Hong Kong residents who are fully vaccinated, and they must hold a negative COVID-test result (within 48 hours) before entering Macau.

‘Hong Kong visitors will be allowed to enter Macau’s hotels and casinos, but they will be required to remain within designated gaming areas and hotel rooms. It is understood that hotels will have certain floors dedicated for HK guests for rooms and areas of the casino will be for HK players only (i.e., converted junket rooms, etc.),’ the Bernstein report states.

Local authorities indicated last week that they were still considering if Hong Kong travellers would be allowed to gaming areas.

Last week the Macau Government Tourism Office (MGTO) revealed that there are already 51 hotels representing 2,700 rooms in Macau that had agreed to accommodate the Hong Kong visitors who hold the new “Blue Health Code” that will be provided to them.

The brokerage also noted that a breakthrough in negotiations between Hong Kong and Shenzhen to also resume quarantine-free travel by mid-July will also be crucial to determine the conditions of the travel scheme with Macau

During her trip to Beijing to attend the 100th Anniversary of the Communist Party of China, Chief Executive Carrie Lam was said to have pushed for the implementation of quarantine-free travel between Shenzhen and Hong Kong.

‘It is understood that the Chinese and Shenzhen governments intend to keep the policy tight until July 10, but to start negotiation with Hong Kong authorities on July 11,’ the note added.

‘Once there is a breakthrough during the border reopening negotiation between Shenzhen and Hong Kong, the Macau government’s previous requests from Hong Kong (i.e. “28 days zero local cases”, or “14 days zero import-related cases”) may be changed to match the latest agreement between the mainland and Hong Kong’.

Macau had requested that HK have zero local transmission COVID cases for 28 days and later indicated 14 days if the cases were deemed to be linked to international arrivals.

After any scheme is initiated a new local case in HK with an unknown source could lead to a 28 days recount and a new local case linked to an imported case could lead to a 14 days recount.

In terms of what it would represent to the local gaming sector, Bernstein notes that Hong Kong residents, in normal years, contributed about 20 per cent of Macau visitation and some 15- 20 per cent of revenues, but this would require full normal travel resumption.

‘We expect July GGR to be down in the high-50s per cent compared to July ’19 (+50 per cent m/m from June ’21), factoring the potential reopening of HK-Macau travel and reduced travel restrictions between Guangdong and Macau,’ the report adds.