The upcoming “golden week” holiday will come as a relief for Macau’s struggling casinos and hotels, as hordes of Chinese tourists are expected to travel to the gaming destination after restrictions for visitors from across the mainland are eased from next week.
Initial hotel bookings indicate that things are starting to look up for the former Portuguese colony’s economy, which depends heavily on mainland Chinese tourists.
Five out of the 23 hotels tracked by Morgan Stanley have been fully booked for the first five days of October, compared to 16 during the golden week holiday last year, according to a report by the US investment bank released this week.
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This year’s golden week holiday runs from October 1 to 8.
“We are seeing meaningful improvement in occupancy before and during golden week”, but room rate still “remains weak”, according to the report from analysts led by Praveen Choudhary.
Travel restrictions between Zhuhai and Macau were eased in early August and that was expanded to cover all residents of China’s southern Guangdong province from August 26. People from the rest of the mainland will be allowed to travel to Macau from September 23.
The coronavirus crisis has taken a toll on the city’s casinos as Macau closed its borders to tourists. Gross gaming revenue in the gaming destination has fallen by more than 90 per cent year on year for the past five months, including a 94.5 per cent decline in August to 1.33 billion patacas (US$166 million). Analysts are estimating a decline of closer to 85 per cent for September.
Four of the five hotels – Ritz-Carlton, StarWorld Hotel, Morpheus and Studio City – have been fully booked for seven days, the report said, adding that some of these hotels have seen significant declines in room rates of up to 72 per cent compared to last year.
On the other hand, Sands Macao and MGM Macau, which have increased average daily rates by 90 per cent and 104 per cent, respectively, are struggling with bookings, the report showed.
“National Individual Visit Scheme [tourism visas] will resume from September 23, one week before October golden week, which should drive hotel occupancy higher,” the report said. “The 2020 golden week average occupancy rate [would be] 80 per cent for the 10 hotels we surveyed.”
Another investment bank Jefferies expects “the gradual improvement trend [in gross gaming revenue] to continue and build-up to a profitable golden week, but the magnitude of the recovery is still unclear and dependent on Individual Visit Scheme approval”.
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