Posted on: September 1, 2022, 07:13h.
Last updated on: September 1, 2022, 03:48h.
Macau thought its casino market would be approaching pre-COVID-19 levels by now, but that’s not happening. The city still faces a threat from the coronavirus pandemic, suppressing traffic and keeping gross gaming revenue (GGR) well below expectations.
The Gaming Inspection and Coordination Bureau (DICJ, for its Portuguese acronym) has released the figures for Macau gaming for August. While August brought a significant improvement over July, the result is still half what the Chinese SAR recorded in August 2019 and last year.
GGR last month was $270.8 million, around 450% greater than in July when Macau saw one of its worst performances ever.
At the same time, though, it was 50.7% of August 2021’s amount of $550 million. This is despite the recent relaxation of travel restrictions between mainland China and the city.
Macau Loses Ground
In August 2019, Macau’s casinos recorded GGR of $3 billion. The city has struggled since the beginning of the pandemic. With the COVID restrictions still lingering, GGR across the first eight months of the year was slightly better than that month.
From January to August, the total GGR was $3.58 billion, 53.4% lower than last year. It’s also 85.4% lower than it was in 2019.
In July, Macau ordered many commercial businesses, including casinos, to close for almost two weeks because of a new COVID-19 threat. Inarguably, the decision to lift COVID-19 restrictions for inbound travel from the mainland boosted casinos in August. However, not by much.
From August 20-26, the average daily arrivals were 14,737. This doesn’t come close to the more than 108K visitors who passed through Macau’s borders daily three years ago. In July, amid the new outbreak and shutdowns, only 9,700 visitors entered daily.
A new update that relaxes travel from 41 countries may help. But a seven-day mandatory quarantine will keep many would-be travelers away. In addition, new outbreaks on the mainland will hurt.
The provinces of Xinjiang, Hainan, and other popular tourist destinations will also subdue Macau’s inbound travel. For the third quarter, visitor arrivals may only reach around 10% of the pre-COVID-19 figure, according to Bloomberg Intelligence analyst Angela Hanlee.
Operators Continue to Bleed
As a result of the lackluster activity in Macau and suppressed operations in all of its markets, Melco International Development is struggling to find solid ground. The parent company of Melco Resorts & Entertainment reported net revenue of $1.07 billion for the first half of the year.
This was a drop of 28% from last year. The good news is that Melco has more money available – around $1.65 billion in cash and $1.1 billion in credit – to keep it moving forward.
Sands China also took a hit. It recently reported a first-half loss of $760 million, following losses last year. Wynn Macau also reported shrinkage in its piece of the market, losing around $50 million from the first half of 2021.
It hasn’t been all bad, though. Ponte 16, a Success Universe property in Macau, cut its annual EBITDA loss from $5.27 million to $120K for the year’s first half.