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Macau March GGR seen down mid-60%, HK reopening in Q2: Bernstein

Macau Gross gambling revenue (GGR) in March is expected to be down in the low to mid-sixties percent from the same month last year, though visitation is expected to improve in Spring and travel with Hong Kong may resume from Q2, Bernstein Research said in a note.

On Monday, the Gaming Inspection and Coordination Bureau (DICJ) posted figures showing February GGR was up 135.6 percent from February last year, when the casinos were closed for two weeks, coming in at MOP7.31 billion ($914 million). 

However, revenue was down from MOP8.02 billion the prior month after China stepped up travel restrictions again due to new clusters of Covid-19.

Still, Bernstein said the February figures were in line with its expectations. 

“On a relative basis, premium mass was the best performing segment during the month, while junket VIP was most hamstrung and base mass continued to be hampered by low levels of visitors and HK travel closure.”

The firm said it doesn’t expect to see a travel bubble forming with Hong Kong until late Q1, or more likely until Q2.

“A travel bubble encompassing China/HK/Macau should be a key driver of recovery,” it said.

The remaining travel restrictions to Macau from China have now been lifted after Covid outbreaks were brought under control. However, that wasn’t in time to allow travel during the key Chinese New Year period. It is also yet to reinstate e-visa applications for Individual Visit Schemes, which is creating processing bottlenecks and hasn’t permitted group visa travel.

Like most analysts, Bernstein is still expecting Macau to stage a strong recovery from H2, with GGR for the year likely to reach as much as two thirds of 2019 levels. Mass is likely to get back to 75 percent, while VIP will only get back to half of its pre-pandemic levels.

Although the analysts are cautious, Melco Resorts & Entertainment CEO Lawrence Ho is more upbeat that the recovery will begin to take hold sooner rather than later, pointing to mid-to-late March.

On a recent conference call with analysts, he said he had been surprised by the late surge in demand over the final two days of the New Year holiday and was even optimistic about an early resumption of e-visas.

He said for the first time in 12 months he can see more positives than negatives. 

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