Even though Macau has been able to go six days now without new instances of the coronavirus, dubbed COVID-19, being reported, some analysts believe the temporary shutdown of the city’s casinos might need to be extended. Analysts with the Sanford C. Bernstein brokerage weighed in on the topic in a report yesterday, indicating that they feel there is a “strong possibility” the closure will continue, at least until health officials are more confident that any potential threat of the spread of the virus has been contained. The number of deaths from the flu-like illness has now surpassed 1,100 across the globe, but the rate of infection is already beginning to decline.
The casinos were ordered to temporary close their doors on February 4, with the shutdown to be in force until the end of the day on February 19. At a briefing on the subject of COVID-19 and the city on February 10, health officials wouldn’t offer any input on whether or not the closure might, or might not, be extended. However, everyone wants the situation to end as soon as possible.
The virus was identified shortly before the Chinese New Year celebrations, and traffic to Macau already began to decline before the closure was announced as a result. Since the 15-day suspension began, gross gaming revenue (GGR) has suffered tremendously and Bernstein analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu point out that, for February 1-4, the GGR fell 75% compared to last year. It was also down 68% compared to last month and 69% lower than this past December.
Because there isn’t any information on whether or not casinos will be able to turn their lights back on after February 19, the analysts are non-committal on what the rest of the first half of 2020 holds. They explain that the forecasts for Macau’s casinos “for the near term (i.e. first-half 2020) are largely guesses at this time, with the biggest variables being when casinos reopen, and even more importantly, when travel restrictions from China will be lifted.” However, they add that the near-term results look “bleak,” and that there could be “a solid recovery in place in the second half, followed by a strong 2021.”
Visitation to Macau is at a virtual standstill. Since January 27, the numbers have dropped by over 90% and are down 30% compared to last year. This past Saturday, per Macau’s Public Security Police Force, the once bustling city saw its lowest visitation figures in recorded history – just 2,800 people.
On January 27, 36,000 visitors arrived in Macau. By February 4, essentially the prime window of CNY’s Golden Week, the number was just 8,000. The city’s borders are now shutting down earlier – 10 PM, as opposed to the normal 1 AM – and almost everything in Macau has come to a grinding halt. Hopefully, health officials won’t find it necessary to extend the shutdown.