Easing of HK travel restrictions and possible vaccine to lead to strong gaming results in 2021 H2 – Fitch

The rating agency noted that local gaming results have reported accelerating growth in the second half of this year, led primarily by the premium mass segment, but warned many factors are still dragging down results.

‘Individual visit scheme visas application requirements and processing times vary by province and remain a source of friction for visitation to Macau from mainland China. Travel restrictions with Hong Kong are also a headwind,’ the agency added.

Gaming revenues rose by 228 per cent in October when compared to September to some MOP7.27 billion, but even so, represented a 72.5 per cent drop when compared to the same month of 2019.

Meanwhile, the city reported about 582,000 visitor arrivals in October, accounting for a 29.6 per cent jump from the previous month.

Hong Kong authorities have started allowing residents to return from Macau and Guangdong without the need for a 14-day quarantine since November 23 however arrivals from Hong Kong to Macau are still required to carry out the medical observation.

In a report entitled ‘Fitch Ratings 2021 Outlook: Global Gaming’, the rating agency considered that gaming markets that are more reliant on local visitation, such as Australia or Macau, or that could be the first to benefit from a vaccine, such as Las Vegas, will continue to recover faster.

American pharmaceutical company Pfizer and its partner BioNTech submitted an application last week for emergency authorisation in the US of their Covid-19 vaccine, and the first Americans to receive a Covid-19 vaccine could get it as soon as 11 December, according to the head of the US coronavirus vaccine programme.

Other promising vaccine candidates include projects under development by Moderna, AstraZeneca and the University of Oxford, and Russia’s Gamaleya Research Institute of Epidemiology and Microbiology.

Beijing-based Sinovac is also conducting efficacy trials in Brazil, Turkey, and Indonesia.

‘Amid higher COVID-19 cases globally, targeted measures such as temporary closures and heightened operating restrictions are possible. However, we expect an impact from such measures to be less acute in 2021 relative to 2020. The potential vaccine availability will allow destination markets like Singapore and Las Vegas to begin recovering more in earnest in 2H21,’ Fitch noted.

In his recent 2021 Policy Address, Chief Executive Ho Iat Seng said that the recovery of Macau’s economy, tourism and employment will only be possible with the vaccine of covid-19 and only if all residents take it.

Local health authorities have already indicated that they plan to purchase 1.4 million doses of a successful vaccine to cover the city’s residents.

The Macau government expects the economy of the territory to fall by 60.9 per cent in 2020, with local authorities having collected only MOP24.34 billion until October indirect taxes on gambling, a drop of almost MOP70 billion in an annual comparison.