Macau gross gambling revenue is creeping higher, but hopes for a near-term boost from a reopening with Hong Kong may have faded after a new cluster of Covid-19 the latter city.
Macau's average daily rate (ADR) of gambling revenue was about $34 million in the most recent week of March, up 6 percent on the prior week, according to Bernstein Research.
March month-to-date ADR is down 68 percent from the same period in 2019, but is up 1 percent from February this year.
China is still dragging its feet on reinstating the ability to apply for individual visit scheme visas electronically, which all industry watchers say will be a key catalyst for growth. It has given no indication when e-visas, or group visas, will be permitted despite lobbying from Macau officials in Beijing.
Another potential driver would be a reopening with Hong Kong, which accounts for about 10 to 15 percent of Macau's revenue. Hong Kong had managed to reduce its caseload to about 24 in a seven-day average period, from 129 cases a day last July.
However, there was a setback this weekend due to an outbreak linked to a gym used by expats. Bernstein notes there were 60 cases recorded on March 12 and 47 on March 13.
"The city has reduced some social distancing measures since February, but a spike in new cases may derail the loosening in the short term," it said, adding it doesn't expect travel to Macau to resume until late Q1, but more likely in Q2.
Due to the ongoing travel and visa restrictions, Bernstein doesn't expect to see a meaningful recovery until the second half of the year. However, it does expect that recovery will be significant in the latter half.
For March as a whole, the firm is expecting a decline in the mid-sixties percent from 2019. In the full year, it's forecasting that GGR will reach about two thirds of its 2019 levels, lead by the mass market, which will recover to 75 percent of what it was. The VIP market is expected to be weaker, only getting to half of its prior levels.
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