Posted on: March 8, 2022, 06:32h.
Last updated on: March 8, 2022, 01:26h.
Macau’s gross gaming revenue (GGR) isn’t progressing the way the industry would like. It is likely to remain stagnant in the short term, which is having an impact on gaming employment as well.
Macau enjoyed a small uptick in activity for the Chinese New Year, but it didn’t last. The city’s gaming industry stalled soon after and still hasn’t picked up. The Bernstein brokerage isn’t optimistic about any short-term improvements, either. An increase in COVID-19 cases on the Chinese mainland has again hurt Macau.
Bernstein analyst Vitaly Umansky, in his latest channel check for Macau, points out that the first week of March delivered MOP$1.1 billion (US$135 million) in gross gaming revenue (GGR). The average daily rate was MOP$183 million (US$22 million), which is 78% lower than the same period in 2019. It’s also 32% lower than a year ago when COVID-19 still held the city in its grip.
China’s COVID outbreak is still largely under control. Still, the largest feeder market, Guangdong, is reporting rising cases, which could lead to further spread in China and greater travel impediments in the near term,” wrote Bernstein analyst Vitaly Umansky.
The rise in COVID-19 cases in China’s Guangdong province is causing concern in Macau. Entry into the city requires a negative COVID-19 test within 48 hours of the visit if traveling from the province. Travel from other provinces requires a negative test within seven days.
In Guangdong, there were 92 new COVID-19 cases yesterday, according to Johns Hopkins data. This is lower than the 120 a day earlier but is representative of a trend appearing since late last month. The seven-day average of new cases in the province is now 111, and this figure continues to increase.
Hong Kong Also Causing Trouble
Exacerbating the situation is a large number of cases in Hong Kong. Although the number has tapered off, dropping daily from March 3 through 7, the seven-day average is high. There were 25,150 new cases yesterday, resulting in a seven-day average of 41,540.
Mainland China and the Hong Kong SAR are important feeders for Macau’s gaming operations. Losing traction in both makes it exponentially more difficult for the city to recover to pre-pandemic gaming levels.
As a result of the new challenges, Macau won’t see strong results this month. Umansky believes there will be a 25% month-on-month decline in average daily GGR. This would also be 75% lower than the figure from March 2019.
From February 28 to March 2, travel dropped 26% from its prior week’s figure. Macau’s Public Security Police Force reports slower traffic, which will also prove to be a hurdle.
Local Gaming Employment Suffers
With all of the challenges Macau faces, gaming operators have had to make difficult decisions. Among these is the approach to staffing levels, which declined throughout 2021. There were 54,839 employees at the end of the year, 1,774 fewer than at the beginning.
The Statistics and Census Service indicates that the figure does not include junket employees. However, this segment is also facing an employment crunch, as junket operators have stopped working in the city.
The gaming industry employed 24,406 dealers and 4,899 service and sales employees at the end of 2021. While the numbers have dropped by 758 and 410, respectively, there was a little bit of good news for active employees. Operators gently bumped up their salaries by the end of the year.