Macau: “VIP business remains challenged”

S&P Global believes Macau is far from reaching pre-Covid-19 levels.
S&P Global believes Macau is far from reaching pre-Covid-19 levels.

Operators saw a small recovery in October but mainly in the premium mass segment.

Macau.- Financial analysts believe there will be growth in visitation to Macau from travellers that avoided Golden Week in October but VIP business will continue recovering at a very slow pace.

A note by Jefferies said: “We believe the gradual recovery is due to pent-up demand from patrons avoiding [Macao] during Golden Week.

“The VIP business remains challenged due to liquidity pressures, and we therefore expect a slow and gradual recovery.” 

All major casinos reported a rise in visitation in October beyond Golden Week. This resulted in a 72.5 per cent drop in the month’s gross gaming revenues year-on-year after a semester with falls of over 90 per cent each month.  

However, S&P Global said that reaching pre-pandemic levels will take some time as yet.

Analysts said despite the lifting of travel restrictions from the mainland, “the industry is set for a slow recovery, mainly due to the requirement for a negative Covid-19 test and the lengthy processing period for tourist visas.”

The only visitors allowed are those arriving from China, and they must not have visited a foreign country within 14 days. 

So far, operators saw a recovery in the premium mass segment, defined as wealthy middle-class individuals placing big bets. This segment is crucial to driving a recovery with the gradual easing of visa backlogs.

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