Guangdong COVID Outbreak Causes Issues for Macau
An outbreak of COVID-19 cases in Guangdong has caused stricter boarder controls that may affect the recovery process for Macau.
The COVID-19 pandemic began in early 2020 and has remained an ongoing problem. First, countries shut down and had everyone stay at home in order to slow the spread of the virus. Restrictions stayed in place for months as countries tried to maintain some type of control over the virus. For casinos, this caused a complete shutdown of the gambling industry and the recovery process has been slow going as the virus is still an issue in many areas. Just this week, an outbreak in Guangdong has caused experts to believe the Macau’s recovery will be even more delayed as stricter border controls are enforced.
Increase in Cases Nearby
Since June began, over 100 new cases of COVID-19 were recorded in Guangdong. Most of the outbreak appears to come from Guangzhou and Foshan. Because of the increase, authorities in Macau are now requiring anyone that is visiting the region from the province to provide a negative test. The test must be no less than two days old. In the past, the requirement was a seven day old test.
Travelers from the two mentioned cities in the province must quarantine for two weeks when traveling to Macau. The goal is to avoid a major outbreak in Macau, a feat the region has been able to do for more than a year because of strict protocols.
While the measures will help to protect citizens and visitors to Macau, the tighter policy will weight on demand. It could push the recovery process back a few months, according to analysts. The impact of the Guangdong regulations could be vast and ongoing for several months. The province provides around 45% of the visits to Macau.
If visitors are going to be subject to possible quarantine or have the submit a negative test, they might not be willing to travel at all. The lack of travel will greatly affect the overall recovery process for Macau.
Quick Recovery Was Expected
When the pandemic began, experts believed that eventually, Macau would be one of the first gaming markets to recover. However, getting back to pre-pandemic levels has been difficult. Many concessionaries in the region are showing disappointment in the slow recovery pace. While this is the case, they are supportive of the safety-first strategy.
The travel bubble is likely to continue involving Guangdong, Hong Kong, and Macau, which will lead to a slower recovery process than expected. It is believed that travel will not be allowed without restrictions to Macau until Hong Kong and Guangdong are able to report zero new cases of COVID over a two week time frame.
The news comes as Macau seemed to have entered a new recovery process. for May, the gross gaming revenue totals came in at an increased percentage and daily arrivals had increased as well. Analysts are not comparing Macau totals to 2020 as the numbers too soft. However, when looking at 2019, it appeared that the region was starting to see a form of recovery.
While Macau was not on a full blown recovery track, revenues and visitor totals were looking good since the first of the year. However, now that COVID is increasing in nearby Guangdong, the trend will most likely start to go in the opposite direction.
The current scenario will affect the time frame for Macau’s recovery. Analysts predict that the recovery process could stretch into 2023, but it is unclear if that will be the case. We shall see over the next few months if these new restrictions cause a major recovery issue or if the outbreak will be minimal and things will get back to normal sooner rather than later.