Zhuhai COVID-19 outbreak causes revenues to drop in Macau
COVID-19 continues to rear its ugly head in Macau, this time causing revenues to drop once again. Last week, a huge dip in revenues was seen after border restrictions were tightened after an outbreak of the virus was detected in nearby Zhuhai. The gross gaming revenues came in at 53% less than the previous seven-day period.
Visitation Affects Revenue Totals Again
Brokerage Bernstein is reporting within its weekly check that gross gaming revenues for January 17-23 came in at MOP$244 million ($30.5 million) when compared to the week before. Just prior to the outbreak and restriction changes, Macau was bringing in MOP$114 million ($14.2 million).
According to Inside Asian Gaming, the brokerage blamed the dip on lower visitation due to tighter border controls, with a 24-hour COVID negative test required, plus travel advisories. So far, the Zhuhai outbreak of COVID-19 seems to be contained, and no new cases were reported on Sunday.
However, positive COVID cases in Hong Kong may be an issue. As the numbers increase there, Macau will most likely continue to keep its borders closed to the region. With players unable to visit from nearby regions, the revenue totals will only continue to decrease in Macau.
Along with overall earnings declining, Macau is also seeing a decrease in VIP gaming. In December, VIP options dropped more than 50% due to the dismantling of the junket industry. Analysts predict that the overall gross gaming revenues in Macau will continue to drop with January totals.
Maintaining Gaming Concessionaires at Six
The poor revenue report comes just a short time after the government of Macau announces that the number of its gaming concessionaires will remain at six. The decision was made after the current set of operators is set to see their 20-year authorization expire this June.
This time, the license holders will operate for 10-year time frames. The operators can bid to extend current licensing through 2032. However, details on how to complete the new tendering process have yet to be revealed.
As the news of the decision broke, the shares of companies invested in the market skyrocketed. Wynn Macau Limited jumped by around 9% while MGM China Holdings Limited moved up 11%. Sands China Limited increase even further at 14.6%.
It will be interesting to see if shares continue to remain steady or if the drop in revenues continues, resulting in a lower share price due to the continual struggle of the market connected to the COVID-19 pandemic.
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