Research Suggests Macau Won’t Reach Full Recovery Till 2024


As Macau tries to get back to normal amidst the COVID-19 pandemic, recent reports predict that pre-pandemic levels won’t be reached until 2024.

In Macau, the local economy is dependent on gaming. The casinos in the area drive commerce and since the COVID-19 pandemic started in early 2020, the region has been plagued with closures and travel issues. The gaming area is trying to recover, but it seems the process is going to be ongoing. Moody’s Investors Service suggests that the recovery process will need to be long-term, and the region won’t be able to reach pre-pandemic levels until 2024.

New Report

In its report, the research firm says that the economy in Macau is the worst hit by the virus on a global scale. While this is an issue, the region still has strong sovereign finances. The company has placed Macau with an Aa3 rating. They see the outcome for Macau to be stable and there will be long-term recovery.

According to Moody’s the rating for Macau shows a balance between credit constraints and strengths. The growth volatility for the region is one of the highest of all the rated sovereigns. The region has tried to diversify and find other ways to bring in revenues aside from gaming for quite some time and have thus far been unsuccessful.

The reserves of Macau are vast and stronger than its peers that received a similar rating from Moody’s. The region has a high per capita income that helps to support its credit profile. The information from Moody’s comes at the same time as the region is reporting an improvement in profits as well as higher spending among visitors. The region is also seeing higher visitor numbers.

When 2021 began, analysts reported that Macau would see a quick rebound when compared to its rivals, like the Las Vegas market. However, several closures and re-openings led investors to become frustrated with the recovery speed.

Long-Time Coming

Because of the inconsistency in Macau, analysts now expect that the region will not be close to recovery until next year or beyond. The goal is to reach pre-pandemic levels, so that earnings are back to normal. It is expected that the region will start to see a semblance of recovery next year, but even more so by 2023 and 2024.

Based on Moody’s assessment, a fully recovery will not take place until early 2023. The analysis considers tourist arrivals and how they recovery. The analyst group feels that there will be a gradual recovery by the second half of 2021 to a 25% shortfall next year. The group thinks that pre-pandemic visitor levels will be reached in two years.

Reliant on China

Macau is heavily reliant on citizens of China when it comes to visitor numbers. Around 70% of the visitors to Macau come from the mainland. Hong Kong is another area where visitors come from and the region was recently cut off from Macau as a way to create a travel bubble.

Moody’s pointed out that Macau is the only territory of China where gambling is legal. The gaming industry is vulnerable to slower growth in China as well as to local government policy. They must also contend with competition in other gambling destinations nearby such as Singapore and Cambodia.

Only time will tell as to how the economy of Macau will recovery. Hopefully, the region will continue to see higher traveler numbers and be able to open back up to regions that have been closed off due to the travel bubble. COVID-19 is still an issue as new variants are being found on a regular basis and Macau wants to be careful as it offers services to avoid a major outbreak.

Associate Writer: Suzie has extensive experience writing on a number of different topics, but writing on slots remains her first love, and it really shows.