Hong Kong Chief Executive Carrie Lam Wants Travel Restart with Macau

Posted on: September 30, 2020, 08:07h.

Last updated on: September 30, 2020, 12:00h.

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Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Hong Kong is angling to resume travel with Macau and mainland China, with leaders from the special administrative region (SAR) saying the time is appropriate to do so as coronavirus case counts there continue declining.

Chief Executive Carrie Lam said a third wave of COVID-19 cases that started in July is now contained. After peaking at nearly 150 cases on July 30, Hong Kong’s daily tally of fresh instances of coronavirus infection is below 10 for the 10 days ending Sept. 29.

It is time for us to take a very pragmatic approach to allow people flow, whether between Hong Kong and the mainland, or Hong Kong and Macau, and Hong Kong with other overseas places,” said Lam in a Tuesday press briefing.

Hong Kong plays a pivotal role in Macau’s recovery plans because, in a normal operating environment, the former accounts for about 15 percent of the annual visits to the gaming center.

Pandemic Previously Pinched Plans

Currently, a traveler looking to move between Hong Kong and either Macau or mainland China is subject to 14-day quarantine protocols on both sides of their trips.

In June, it was revealed that Hong Kong and the casino hub were in discussion about forming a travel bubble. But those plans were halted amid a spike in COVID-19 cases in Hong Kong. Since then, Guangdong province, the mainland region closest to Macau, resumed issuance of individual visit scheme (IVS) permits, with the rest of China joining the party last week. That leaves Hong Kong as an outlier when it comes to travel with the gaming center.

Over the course of the pandemic, as of Sept. 29, Hong Kong has 5,088 coronavirus cases and 105 deaths. Macau has just 46 cases and zero fatalities.

Both SARs rely heavily on tourism as an economic driver, and their fortunes are tied to each other as well as mainland China. Visitors arriving via Hong Kong account for up to 15 percent of Macau’s gross gaming revenue (GGR), while mainland China drives more than 90 percent of visits to Hong Kong.

Baby Steps

Looking to speed along its economic recovery, Hong Kong recently relaxed some social distancing measures. But Macau concessionaires are likely hoping for more.

The Golden Week holiday starts tomorrow and, as of last week, up to 40 percent of the hotel rooms in the casino mecca were booked, according to the Macao Government Tourism Office (MGTO). That figure would likely be higher with contributions from Hong Kong.

Resumption of travel with its fellow SAR is vital for Macau for another reason. Analysts are forecasting lingering softness in the VIP segment, putting the burden on concessionaires to lure more mass market gamblers to the peninsula. Restarting the flow of tourism between the two regions could augment some of the weakness in the high-end market.