The casino industry in Macau is set to benefit from the Chinese government’s decision to launch a multi-entry visa for tour groups between Macau and Hengqin, as well as faster visa processing measures, according to a new investment memo from Goldman Sachs.
The investment bank noted that these policy changes “should bode well for the casino industry, especially for the grind mass and low-end premium mass segments.” The memo explained that the new measures will “facilitate more frequent travels to Macau by mainland Chinese, who may find it easier and less time-consuming to apply for visas.” Additionally, the policy is expected to “address the hotel shortage issue in Macau and potentially extend the length of stay by Chinese travelers.”
Macau’s visitors’ average length of stay has already improved slightly from 1.4-1.5 days before the pandemic to 1.6 days as of late.
However, Goldman Sachs has long argued that Macau’s hotel room supply is quite tight, especially during longer holidays, as its 48,000 total hotel room count is only able to accommodate no more than 20 million overnight visitations each year, while Macau had 19 million overnight visitors in FY19 and 14 million last year.
The investment bank maintains a constructive view on the casino industry, despite concerns that Macau’s visitation and GGR data may be softer than anticipated in the near term. Analysts expect “the gradual return of grind mass or lower-end premium mass customers will drive incremental GGR growth in the quarters ahead.”
Earlier, JP Morgan analysts described the relaxation measures as a “surprise gift from the Motherland,” suggesting the policy shows that the Chinese government views Macau as the preferred gaming destination. Staff Reporter
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