As Macau’s results suffer in May and fall by 93.2%, Las Vegas is taking a cautious step towards reopening.
Macau Sees May Figures Plummet by 93.2%
With Las Vegas planning a phased reopening of casino business later this week, Macau’s casino revenue in May should serve as a warning sign as to how realistic a quick recovery is.
Casino revenue in Macau stood at a tepid MOP1.76 billion or roughly $220 million, which was still almost twice as much as the April results, and yet, a paltry amount compared to the same period last year.
The May casino revenue was down 93.2% year-over-year with the novel coronavirus outbreak hitting back in February and paralyzing casinos for two weeks. Now, almost three and a half months later, Macau seems to be still struggling to recover.
Much of this has been chalked up to the Chinese government’s refusal to open borders and allow players to travel to the special administrative region. Revenue so far in 2020 has fallen 73.7% year-over-year, at a time when Macau posted timid forecasts for its growth.
The lack of casino operations and visitors has tanked the territory’s GDP which fell by 48.7% in the first quarter of the year.
Should Las Vegas Fear a Repeat Scenario?
There are many extenuating circumstances contributing to the lack of revenue and visitors to Macau, with travel to Hong Kong still subject to a mandatory 14-day quarantine in either direction. Not least, Chinese authorities have restricted all travel to the special administrative region, depriving it of one of its key sources of revenue – the mainlanders.
Both China and Hong Kong are key to supplying Macau with its players and tourists, especially now when global air traffic has been almost fully suspended. However, JP Morgan Securities Ltd expects that a more comprehensive travel plan in the region will soon be introduced, allowing Macau to see an increase in travelers.
Meanwhile, casinos in Las Vegas are planning to reopen this Thursday, with all properties operating at a reduced capacity and in line with health measures that would allow brands to keep patrons and staff members safe.
Wynn and MGM Resorts have already outlined their reopening plans with the properties opening for patrons as early as Thursday, in line with the state-wide rollout of business under the first phase of Governor Steve Sisolak’s approved measures. However, unlike Macau, Las Vegas is not subject to travel restrictions, notwithstanding existing limitations in air traffic in the United States.
Even then, the country is preparing to open up with commercial flight carriers planning to restart, and most casino bosses hoping to see pent-up demand help make up for the loss of casino revenue in the first quarter of the year.
Owing to Nevada’s self-governance and open borders, the state is expected to see a very quick recovery in the casino segment, with enough patrons to keep the properties busy at reduced capacity.