Macau GGR trending north but concerns raised over new Fujian outbreak

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The detection of around 60 new cases of COVID-19 in Chinas Fujian province over the weekend threatens to stall a recent recovery from Macaus gaming operators just weeks out from the potentially lucrative October Golden Week holiday.

The new cases, believed to be linked to a traveler who returned from Singapore in August, come just weeks after authorities quashed a much larger outbreak that spread from Nanjing to almost 20 provinces and resulted in extensive nationwide travel restrictions.

Macau subsequently reported gross gaming revenue (GGR) of just MOP$4.44 billion (US$554 million) in August the lowest monthly total since September 2020.

After the easing of restrictions saw GGR quickly climb by 74% in the first five days of September, Bernstein analysts said Monday that revenue for the week from 6 to 12 September had grown another 6% to MOP$264 million per day, based on channel checks, continuing the recent recovery trend.

But all eyes will be on the situation in Fujian, located immediately to the east of Guangdong province, in the hope that its outbreak can be contained

Travel impediments to Macau travel are still in place, as Macau still has quarantine requirement on five cities of four Chinese provinces with two cities of Fujian province added over the weekend, said Bernsteins Vitaly Umansky, Louis Li and Kelsey Zhu.

Visitation from 2 to 6 September averaged 44.2k, up 63% from August’s average of 27k (but still down 12% from July average of 50.4k).

A new outbreak in Fujian may hinder the recent recovery trajectory if contagion spreads to the rest of the country and travel restrictions in China are raised again. Assuming no new travel restrictions, we expect visitation to Macau to start getting back to April/May levels by October.

The analysts said Macaus month-to-date GGR through 12 September is estimated at MOP$3.1 billion (US$387 million), up 80% versus August on a daily basis but still down 65% versus September 2019.