Macau Golden Week Less Restricted Than Chinese New Year, Says UBS

Posted on: March 31, 2021, 12:35h. 

Last updated on: June 30, 2021, 09:32h.

Todd Shriber @etfgodfather Read More

Expertise: Financial, Gaming Business, Mergers and Acquisitions.

UBS expects the upcoming May Day Golden Week festivities in Macau won’t be subject to the same travel restrictions as the Chinese New Year celebration. The scenario could benefit the special administrative region’s (SAR) six concessionaires.

The Swiss bank arrives at its hypothesis by way of conversations with an unidentified local official. The Labor Day/May Day festival, which is usually a major tourism driver for the casino center, kicks off on May 1.

We are now at a similar time frame before May Golden Week holiday, and with vaccination efforts rolling out, and Macau not having had a local case in the last 12 months, he (the local official) doesn’t expect to see the same travel restrictions (as Chinese New Year),” said UBS in a note to clients.

Lunar New Year festivities are also a key contributor to Macau’s gaming- and tourism-dependent economy. But rebound hopes on the back of that celebration were dashed this year, as the SAR implemented strict health and safety protocols stemming from the coronavirus pandemic.

Things Are Looking Up

Earlier this month, Macau halted COVID-19 vaccinations after a defective batch of BioNTech’s treatment was discovered. That situation is rectified and locals and casino staff can soon resume receiving the injections.

“Macau had a hiccup with the BioNTech vaccine due to packaging, but he (the official) says local expectations are for resumption of vaccinations this week,” said UBS.

Wider vaccine distribution is part of what’s been a stretch of green shoots for Macau, as the world’s largest gaming hub looks to shake off the effects of the pandemic. Earlier this month, officials there said casinos no longer need to see negative COVID-19 tests to admit patrons.

Additionally, Macau officials are actively working with their counterparts in mainland China to expedite the approval process for individual visit scheme (IVS) visas. Prior to the pandemic, tourists could apply for those permits online. But today they must do so in-person, leading to long wait times that ultimately discourage some travelers from proceeding with trips to the gaming center.

Why Macau Golden Week Matters

Though mostly expected because of travel restrictions, Lunar New Year was a dud for Macau and its gaming operators. That puts some burden on Golden Week/May Day to pick up the slack.

Entering this year, the consensus among analysts was that the SAR was a second-half rebound story. Given Golden Week’s proximity to the start of the back half of the year, that thesis could be imminently tested, with June gross gaming revenue (GGR) figures telling the tale of the tape.

Citing an unidentified source, UBS said it believes it will hear by the middle of April about how open Macau will be for the May 1-5 festival.

Some analysts say it’s possible Macau will approach pre-pandemic GGR levels next year, as it steals share from rival Asia-Pacific gaming markets.