Macau could return to pre-pandemic levels in 2022

According to JP Morgan analysts, Macau’s gaming industry will not see a complete recovery until 2022.

Macau.- JP Morgan Securities analysts have forecast that Macau gaming revenue will not make a complete recovery to pre-pandemic levels until 2022.

According to the researchers, casino GGR might reach MOP292.1 billion (US$36.6 billion) in full-year 2022, a number comparable to the MOP291.2 billion achieved in full-year 2019 before the Covid-19 crisis of this year.

Despite the resumption of the issuing of visas for tourists coming from the neighbouring province of Guangdong, and then for all mainland China, tourism has not yet returned in the numbers expected.

JP Morgan said the loosening of border measures had failed to “unlock pent-up demand” for travel outside of mainland China. Demand was “surprisingly weak” in September with an 85 per cent fall in visitor arrivals year-on-year and GGR down by 90 per cent year-on-year, JP Morgan’s DS Kim, Derek Choi and Jeremy An said.

Visitor arrivals to Macau during the Golden Week holiday period have also been lower than hoped for.

According to JP Morgan there is still a “stigma” among mainland Chinese about cross-border travel during the pandemic, which prevents them from feeling safe about travelling to Macau.

JP Morgan analysts said: “We were overly hopeful on the prospect of pent-up demand, which we thought would outweigh the nuisances related to travel arrangement to Macau and stricter capital control.”

They also attributed the poor figures to mainland China’s large-scale clampdown on overseas gambling, a “higher than usual” scrutiny on capital outflow and junkets holding capital.

JP Morgan believes the Macau gaming market could see improvements if travel restrictions between Hong Kong and Macau are eased.

Researchers noted: “We think Hong Kong’s importance lies in its position as an avenue for capital flow, where a sizable portion of liquidity goes through Hong Kong into Macau.”