Macau Gaming Income Falls to New Low on China Omicron Outbreaks

(Bloomberg) -- Macau's gaming revenue slump deepened in April, plunging 68% from a year earlier to the lowest level in about 18 months as the world's biggest gambling hub suffers from a tourist drought amid China's Covid lockdown measures.

Gross gaming revenue dropped to about 2.68 billion patacas ($331 million), according to the Gaming Inspection and Coordination Bureau. The results were slightly lower the median analyst estimate of a 66.5% year-on-year decline. In March, the city already reported a 56% drop in gaming revenue.

Revenue fell 27% from the previous month, and was down about 89% from pre-pandemic levels in 2019.

Key Insights

Another China holiday season -- the five-day Labor Day break at the start of May --- looks set to be a washout again for Macau. While Chinese holidays have traditionally been a peak season for the enclave, China's strict Covid restrictions in Shanghai, Beijing and elsewhere are keeping visitors at home.
Despite the Covid situation in China being the worst it's been since the pandemic first started in Wuhan in late 2019, Macau has eased some border control restrictions. Visitors from the neighboring Guangdong province are now required to take a Covid test up to three days before entering the city, compared with two days previously, and quarantine is required only for visitors from about 30 Chinese cities now, down from 80 last month. Still, visitors will face onerous curbs trying to re-enter the mainland from Macau, likely discouraging travel.
The easing is a positive signal showing Macau's intention to start improving visitation, but a recovery still depends on the development of China's outbreaks and lockdown measures, Sanford C. Bernstein analyst Vitaly Umansky wrote in a note on April 25. Meaningful easing to travel may only kick in from late 2022, ramping up through 2023, laying a path for full recovery by the following year, JPMorgan Chase & Co. analysts including DS Kim wrote in a April 23 note.
Visitation in March fell 30% from a year earlier to almost 527,000 trips, most from China, according to data from Macau's Statistics and Census Service. Hong Kong, just a ferry ride away, was the second-largest contributor of tourists. The city will release visitation data for April later this month.