LAST WORD 54
Sharon Singleton
Managing Editor, AGB
Lights are on, but no one’s home The lights in Macau’s casinos were turned back on after a two week break in early February, though since then the properties have barely seen a visitor.
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That’s not because it can’t afford it. Thanks to the s one analyst commented: “The reopening is akin to keeping a body alive without efforts and investment of the six operators, Macau has built up fiscal reserves of $72.5 billion. the food required to sustain it.” There are schemes available to help small and All six operators have maintained their staff levels and contributed greatly to charitable medium-sized businesses, but not much love is being efforts in the special administrative region, but with extended to the large casino companies, which are the no end in sight to the border restrictions, it wouldn’t biggest employers and biggest wealth creators in Macau. To be sure, the companies have deep pockets and be unreasonable if their patience is wearing thin. Macau imposed draconian border restrictions back analysts estimate they have enough available cash, or in March, only allowing a limited number of travellers financing to carry them through the crisis, however, from the mainland to enter without compulsory authorities do now seem to be dragging their feet quarantine. As a result visitation has been all but when it comes to border opening. What everyone wants to hear is the return of non-existent with just a few hundred visitors a day the individual visit scheme crossing from the Mainland. that would allow a significant There has been some easing volume of tourists to come on the part of Chinese authorities across the border, rather than in recent weeks, allowing Macau July gross the limited tweaks that allow a residents to travel freely in gambling revenue few business trips and family Guangdong without quarantine, members to travel. but it’s done little to help the plunged 94.5 Noone wants to see a second visitor numbers. percent, its fourth wave of the virus, but Macau is July gross gambling revenue virus free after the last imported plunged 94.5 percent, its fourth straight month of case was released from hospital straight month of a decline of a decline of more in July and Guangdong province, more than 90 percent. In the according to official figures at first six months of the year, than 90 percent. least, is in a similar situation. hotel occupancy was down just A safe travel corridor between under 64 percent. Macau and Guangdong would The operators as a result are each losing millions. Wynn Resorts has put go a long way to easing the pain, with the province its daily losses at $2 million a day, while Morgan accounting for about 30 percent of Macau’s GGR. Stanley estimates that collectively Macau’s operators The corridor could be further extended to other will have amassed losses of about $1 billion in the provinces as and when they become safe. Singapore and Malaysia are planning to create second quarter. Sands China said its Q2 loss came in at $549 such a travel bubble that should take effect on August million, while MGM Resorts said its adjusted EBITDA 17. That will greatly ease the pain for the island state’s loss in the first half was HK$1 billion ($129 million). two integrated resorts, with the bulk of their mass The crisis has sent the companies scrambling to market travellers from its neighbour. Analysts there say the IRs are already receiving a decent trim costs wherever possible, but cutting staff is a no, no and the government isn’t providing a furlough level of support from the local market and could return scheme as in many other jurisdictions to support to EBITDA positive quite quickly once travel improves. In the meantime, Macau’s operators are still waiting. labour costs until the punters come back.
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Asia Gaming Briefings | August 2020
