Fitch Rating is forecasting monthly revenue declines of 50% to 60% (relative to 2019) through the first half of 2021, with accelerating growth in the second half, led primarily by the premium mass segment.
In a report, the credit rating agency noted that the eventual easing of travel to Hong Kong and potential availability of a vaccine drove its assumption for a stronger second half of 2021 performance relative to the first six months.
“Gaming concessions expire in 2022, though the Chief Executive has a multiyear extension option. Fitch continues to believe the concession rebid process will be pragmatic,” the agency stated.
Meanwhile, it reiterated that the Individual visit scheme (IVS) visas application requirements and processing times that vary by province remain a source of friction for visitation to Macau from mainland China.
In the Asia Pacific market, Fitch expects revenues in Malaysia to recover gradually to 75% of 2019 levels in 2021, aided by new attractions and the country’s larger and domestic-focused market.
Singapore’s recovery, however, is likely to be slower while the border remains closed, as revenues are driven mainly by international visitors — with limited near-term visibility into easing. Therefore, the company expects Singapore’s 2021 gaming revenues to reach only 45% of 2019’s levels.
In Japan, meanwhile, Fitch noted that the structural decline in the domestic offline gaming sector, specifically pachinko parlors and gaming arcades, remains a real risk in 2021, particularly as the pandemic has accelerated the shift toward video and online games
“Nevertheless, Fitch believes that the sector will perform better than initially expected as lockdowns have been more limited.”