According to JP Morgan’s latest forecasts, Macau’s gross gaming revenue (GGR) may reach a post-pandemic high in August.
In a release published yesterday by the brokerage, JP Morgan gave a detailed analysis on Macau’s recovery path in the coming months, reaffirming its faith that the city’s gaming business will soon resume former buoyancy.
Analysts are expecting a full recovery in the mass segment to be achieved approximately within a year by the third quarter of 2022.
The optimistic forecast is built on three positive indicators. These include a strong demand shown in mass-market and non-gaming segments, which was substantiated by outstanding mass-market GGR — around 70% of pre-pandemic levels — during the May Golden Week, and record-highs in retail sales at many casinos.
After taking into account the absence of China’s e-visa, group tours and Hong Kong players, the city’s May GGR actually represents a “near-full recovery within accessible markets.”
Another positive sign will be the ongoing recovery progress. In fact, the daily GGR had been climbing for eight consecutive months, but was only just disrupted by a fresh pandemic outbreak in Guangdong province in May and the resulting tightened cross-border measures.
Despite a resurgence in Covid-19 cases in Guangdong, Macau’s GGR “snapped back onto its recovery course as soon as borders normalized in early July.” JP Morgan expects that July’s weekly GGR run-rate will rebound to the strong levels seen in May.
The brokerage has confidence that more relaxed travel regulations will be realized toward the fourth quarter of this year.
Given the above positive indicators, along with strong indications of player inquiries and bookings, JP Morgan is anticipating an “upbeat summer holiday.”
“We expect GGR to resume a sequential recovery path in July (+30% month-over-month) and see a post-pandemic high in August (+20% month-over-month),” the brokerage stated.
The brokerage also took the occasion to share its insights on the Hong Kong-Macau travel bubble plan. Analysts expect the long-overdue scheme will be launched by September, subject to the vaccination rates of both cities and the number of local cases in Hong Kong.
“But it would still be an important step toward further easings of restrictions, such as the expansion of the bubble to non-Guangdong areas, the resumption of the Hong Kong Individual Visa Scheme, the return of e-visa for Macau/Hong Kong, and group tours. We would expect each step to have a few weeks’ gap, and are hoping to see borders and/or visa largely normalized by end-21 or early-22,” JP Morgan said.
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