Macau’s recovery depends on easing travel restrictions: Bernstein

Bernstein Research emphasized in a note on Thursday that the pace and scope of the recovery in the Macau gaming industry was tightly linked to government policy on the easing of border restrictions.

The analysts wrote. “There have been expectations that the three regions [of Macau, Guangdong, and Hong Kong] will create a "travel bubble"; however, with the Hong Kong pandemic situation worsening over the past few days, Hong Kong had extended its fourteen-day mandatory quarantine policy until July 7 (the earliest) and several local transmissions have occurred, raising concern. As such it is possible that travel restrictions between Macau and Guangdong may very well be lifted with Hong Kong joining later.”

“However, there is still lack of any real clarity as to the timing of changes to travel,” they added.

Bernstein feels that there will be no dramatic changes in the situation in June, likely resulting in another month with a year-on-year GGR drop of over 90 percent.

“Guangdong and Hong Kong customers are critically important, driving around 35-40 percent of Macau GGR. Assuming full reopening of Guangdong and Hong Kong, and demand returning to normal levels, GGR could return to 35-40 percent of normal, under which condition most operators in Macau would start being EBITDA positive,” they wrote.

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