GGRAsia – IVS return positive, VIP recovery could take 3yrs: junket rep

IVS return positive, VIP recovery could take 3yrs: junket rep

Aug 12, 2020 Newsdesk Latest News, Macau, Top of the deck

The full return of tourist visas – by the end of September – for mainland China residents wanting to visit Macau, is a “positive” for the recovery of the city’s VIP gaming sector, says Kwok Chi Chung, president of the Macau Association of Gaming and Entertainment Promoters. But it might still take “two to three years” for business volumes to return to pre-Covid-19 levels, due to other factors hurting VIP play, he told GGRAsia.

Authorities in mainland China’s Guangdong province are set to resume on August 26 the issuance of tourist visas to Macau, including visas for package tour groups and for independent travel under the country’s Individual Visit Scheme (IVS). The rest of the provinces in mainland China are to resume issuing tourist visas to Macau from September 23 onwards, just ahead of the so-called ‘October Golden Week’.

The first week of October marks a seasonal holiday encompassing China’s National Day, and is also known as autumn Golden Week. China’s State Council declared the 2020 holiday period as running for eight days, i.e., October 1 to 8, as it also includes the Mid-Autumn Festival. The October Golden Week is usually a peak period for Macau’s tourism and casino industries.

The resumption of IVS visas to Macau “is definitely good news for us,” Mr Kwok said. He added that the junket sector had been struggling in recent months with a sharp decline in customers and revenue.

The IVS programme, which allows mainlanders to travel independently to Macau and some other places, was suspended in late January, as part of Covid-19 containment measures, with tour group visas paused around the same time as the IVS ones. A return of IVS visas has been mentioned by industry insiders as a key element in Macau’s casino market recovery.

Mr Kwok told GGRAsia: “A good number of our VIP clients make use of business visas to come to Macau, but there are also some using IVS visas.”

“It is also good news that the 14-day quarantine requirement for mainlanders returning [from Macau to the mainland] has been lifted in many provinces,” he added.

In separate developments, Macau’s Chief Executive Ho Iat Seng said on Wednesday that, following the resumption of the IVS programme, the Macau authorities did not plan to set any cap on the number of IVS travellers allowed to enter Macau.

Mr Kwok told GGRAsia that, as of July, there were still “hundreds of thousands” of mainland Chinese holding either a valid business visa or valid IVS visa to visit Macau.

On Wednesday, a representative from Macau’s police told the Chinese-language radio service of the city’s public broadcaster TDM that, as of early July, there were approximately “200,000” mainland Chinese residents holding a valid IVS visa for Macau.

Authorities in Guangdong province retrospectively confirmed in late July that they had resumed on July 15 the issuance of non-tourism-related visas, for travels to neighbouring Macau. The rest of the provinces in mainland China were to follow suit with exit visas for Macau-bound travel – for purposes other than tourism – starting on Wednesday (August 12).

Non-tourism-related visas to Macau issued by mainland China provinces include visas for business trips or for study purposes, or for travel related to family matters.

Despite the easing of travel restrictions between mainland China and Macau, Mr Kwok said he remained “conservative” on his outlook for VIP gaming recovery.

“The impact of the Covid-19 pandemic is just too big,” he said, noting that the health crisis was likely to hurt, still for some time, gaming budgets of VIP gamblers visiting Macau.

“There are also other negative factors, related to [China's] economic outlook: one is the ongoing tensions between China and the United States, which is impacting businesses in the mainland; another relates to China’s tightening of controls over capital flows,” he said.

Mr Kwok added: “It may take two to three years” for Macau’s VIP gaming business volume “to go back to 2019 levels”.

Second-quarter market-wide VIP gross gaming revenue (GGR) in Macau was just above MOP1.50 billion (US$187.9 million), down 95.7 percent compared to the prior-year period, and down 89.9 percent sequentially. VIP revenue as a proportion of all Macau casino GGR in the second quarter stood at 46.47 percent, versus 47.19 percent a year earlier.

A set of special guidelines for Macau’s casino industry – including permissible density of seating for customers at gaming tables, and minimum space between tables in use – came into force on February 20 after a 15-day closure to prevent local spread of Covid-19. Taken together, the guidelines have amounted to a scenario where each venue’s operational gaming capacity would be more than halved.

The local authorities currently have no plans to ease the guidelines, said a Health Bureau official, Leong Iek Hou, during a Wednesday regular press briefing on Macau government’s response measures to Covid-19. Ms Leong stated that potential adjustments would only be considered after the pandemic eases, including availability of a vaccine against the novel coronavirus.

(Updated 6.45 pm, Aug 12)