Mainland IVS to boost tourism in Macau and Hong Kong, analysts say

Goldman Sachs predicts the addition of Xi’an and Qingdao to the Individual Visitation Scheme will boost Macau and Hong Kong tourism.

Macau.- Investment banking firm Goldman Sachs has highlighted the potential impact of the decision to expand the Individual Visitation Scheme (IVS) to include two additional cities: Xi’an and Qingdao. According to analysts, this expansion could logically increase visitation in Macau and Hong Kong.

The move takes number of IVS cities from 49 to 51, while the scheme’s coverage of mainland China’s population and GDP will expand from 32 per cent and 45 per cent to 33 per cent and 47 per cent, respectively.

They noted that Macau’s gross gaming revenue (GGR) for February reached MOP18.5bn, indicating a recovery to 70 per cent of pre-Covid-19 levels. However, this figure represents a decline compared to the recovery rates reported in January and December last year, attributed to a post-Chinese New Year slowdown.

The investment bank attributed the decline in GGR to a sharper-than-expected slowdown following the Chinese New Year holidays. Daily GGR declined from MOP715m during the first two weeks of February to MOP543m in the last one to two weeks, returning to its run-rate of late last year.

Analysts estimate that mass-market GGR in February was tracking at over 100 per cent of the pre-pandemic run-rate, assuming a steady trend in VIP GGR at around 30 per cent of pre-pandemic levels.

In March and April, analysts at Goldman Sachs expect that GGR will remain stable due to seasonal factors, before picking up again during Labour Day holidays.