The spread of the coronavirus already had Macau and the gaming companies which control the Special Administrative Region’s (SAR) economy, reeling but on Tuesday they received another blow as mainland China and Hong Kong announced a host of restrictions limiting travel to the gambling hub.
Authorities in Beijing will supposedly stop issuing Macau visitors visas on news that the number of confirmed cases of the fatal respiratory illness on the region is now up to seven from six yesterday.
Visa restrictions previously hampered gross gaming revenue (GGR) on the peninsula. For example, the mainland limited visits to the world’s largest gaming center starting in late November. It’s a policy that extended through the end of 2019, ahead of a late December visit by Chinese President Xi Jinping to commemorate the 20th anniversary of the handover of Macau to China from Portugal. As a result of that policy, November and December were two of the worst revenue months of 2019 on the peninsula.
As reported by casino.org, the Hong Kong Maritime Department said that starting on Thursday, Jan. 30, it will considerably decrease the number of ferries escorting passengers between the two SARs, adding to the dismay of Macau tourism and gaming companies.
Rail travel and tour buses heading to the gaming hub will also be reduced, while flights originating on the mainland heading to Macau will be slashed by 50 percent in an effort to contain the spread of the coronavirus.
Called the “Wuhan virus” as it’s believed to have originated in the city that’s the capital of the Hubei province, the illness has supposedly infected over 4,500 across the world, and the death toll is now 106 in China, suggesting that number rose by 60 percent overnight.
It is quickly spreading in Macau also. Compared to the amount in central China, the seven confirmed cases there may look like a small number; however, that’s seven cases more from just one on Jan. 22. A viral outbreak couldn’t is never welcome but the 2020 coronavirus epidemic began just before the coming of the Chinese Lunar New Year, which was anticipated to boost visits to Macau, offering a foundation for a strong start to 2020 after GGR there suffered last year.
According to Seeking Alpha, “Analysts are forecasting a huge drop in Macau gross gaming revenue for the January-February period, but are also quick to note how quickly the sector has bounced back from other outbreaks in the past.”
The outbreak is having an adverse effect on gaming equities. Shares of Las Vegas Sands (NYSE:LVS) and Wynn Resorts (NASDAQ:WYNN), two of the major Macau operators, dropped by an average of 16.43 percent over the past week, though both stocks were trading a bit higher on Jan. 28.
While the Hong Kong ferry decrease isn’t slated to go into effect until Thursday, a document obtained from the SAR’s maritime department indicates that, as of this writing, no vessels are scheduled to leave that port for Macau today.
That’s important, since Hong Kong is a major access for mass market gamblers entering Macau, the demographic which was anticipated to prop up GGR until VIP revenue increases again in the second half of the year.