Macau's gaming revenue beats May expectations as tourists return

Hong Kong

MACAU'S gaming revenue beat analysts' expectations in May for the first time in four months, as tourism from mainland China swelled over the Labour Day Golden Week holiday.

Gross gaming revenue rose 492 per cent in May 2021 to 10.4 billion patacas (S$1.72 billion), according to data from the Gaming Inspection and Coordination Bureau.

That beat the median analyst estimate of a 467 per cent jump year-on-year. Revenue increased 24 per cent from the previous month, but was still down 60 per cent from May 2019, which was well before the Covid-19 pandemic hit.

Daily visitor arrivals in Macau continued to show an upward trend in May as the city tries to attract mainland gamblers who have been discouraged by a tougher visa process amid the pandemic.

Some 167,000 visitors came to Macau during the five-day Labour Day Golden Week holidays from May 1 to May 5, with more than 93 per cent from China, according to the Macao Government Tourism Office.

The average daily visitor arrivals during the five-day holiday rose 158 per cent compared with the Spring Festival in February, and climbed 25 per cent from last month. Still, that figure only amounted to 21 per cent of the figure from the same holiday week in May 2019, before Covid-19 hit.

Gaming revenue quickly dropped off after Golden Week to around 250 million patacas a day, which is 10 per cent lower than in April, said Credit Suisse analysts in a note on May 26, showing that a strong holiday period could not compensate for weak demand seen during the rest of the quarter.

New Covid-19 cases in China added uncertainty to the recovery path for Macau, which depends largely on mainland visitors, and the potential further tightening of Covid restrictions in the mainland could lead to a further slowdown, the note said.

Arrivals from some districts in China's Shenzhen and Guangzhou are already required to quarantine in Macau due to the recent outbreak - measures that serve as a reminder of the risks of recovery, according to Credit Suisse.

Macau has ramped up efforts to promote tourism to mainland residents, given that both sides have largely managed to contain the virus.

However, the city's government still has tight restrictions for travellers from most spots, including neighbouring Hong Kong and Taiwan. Macau's economy shrank 0.9 per cent in the first quarter of 2021 compared to year ago. BLOOMBERG