Macau’s casinos will suffer ‘significant’ blow to cash flow as coronavirus forces Chinese gamers to stay away, warns Fitch
- Trips to Macau by mainland Chinese plummeted 81.7 per cent during the Lunar New Year holiday, according to official figures
- A Fitch report released on Friday cited the effects of restrictive travel measures put in place as part of efforts to curb the rapid spread of the virus
Macau’s casino operators are likely to suffer a “significant” hit to their cash flow thanks to the outbreak of coronavirus, which has just been declared a global health emergency, Fitch Ratings has warned.
A research report released on Friday by the credit ratings agency cited the effects of restrictive travel measures put in place by the Macau and Chinese governments as part of efforts to curb the rapid spread of the virus.
On January 28, Beijing announced a temporary freeze on individual visas for mainland tourists visiting the gambling hub, which had already seen an enormous drop in tourist numbers.
Trips to Macau by mainland Chinese dropped a staggering 81.7 per cent during the Lunar New Year holiday compared to the same period a year earlier, according to the latest figures from the Macau Government Tourism Office. During the fifth and sixth days of the Lunar New Year, January 28 and 29, visits dropped 90.6 and 91.8 per cent respectively.
Fitch noted that during the 2009 swine flu pandemic, Macau’s gaming revenue fell 17 per cent and visitor numbers declined 16 per cent in June, the month Macau reported its first confirmed case. However, by September of that year, revenues had recovered.
The big question for Macau’s casinos is how long the Wuhan coronavirus outbreak and associated travel measures will last.
“If this is over in two months and forgotten in six, it won’t be a problem,” said Vitaly Umansky, a gaming industry researcher with Sanford C. Bernstein. “If it continues until summer and there’s no end in sight, that’s a problem.”
