Travel advisory against Chinese New Year trips could bring Macau down


Photo of Red Paper Lanterns

Whether a mainlander working in Macau who hopes to head home for the holidays or a mainlander hoping to travel to Macau for a little R&R, Macau and China want everyone to stay at home. That is the general recommendation ahead of the Chinese New Year (CNY) next month, which has found the governments of both locations urging against making travel plans. The suggestion comes as China has begun to see new spikes in COVID-19 cases and fears are mounting that travel might cause the virus to spread more.

Macau’s Labour Affairs Bureau (DSAL, for its Portuguese acronym) said yesterday that businesses should encourage their Chinese mainland employees to stay put and not consider traveling home for the CNY. However, it emphasizes that it’s just a suggestion and not an order, adding that avoiding travel can help keep Macau safe. A spokesperson for Macau’s Health Bureau added, “The call is not compulsory. We hope to reduce the risk of transmission within the community. It doesn’t mean that Macau is in an urgent situation, but we want to prepare early to deploy various works and coordinate with different departments and institutions.”

February 11-17 will mark the CNY Golden Week holiday period and, like last year, won’t bring a lot of relief to Macau. Visitation was down over 78% last year, falling from 1.21 million in 2019 to just 261,100 in 2020. With a major decline expected this year, and citing logistics issues, Macau has already called off its traditional CNY fireworks display and parade.

Macau receives most of its Mainland China visitation from the Guangdong province, which accounted for 60% of the arrivals recorded last year. However, the provincial health office has stated that residents, of which there are around 100 million, shouldn’t consider traveling to Macau, or anywhere else, this year to celebrate the CNY. If last year’s numbers are any indication, Macau can prepare now for a boring Golden Week once again.

The stay-at-home recommendations are going to hurt any chances of Macau enjoying a rebound. The end of 2020 brought some relief, but renewed COVID-19 issues around the world are going to drag it down this year. Analysts with the Sanford C. Bernstein brokerage expect the drops to continue beginning now, and predict that Macau’s gross gaming revenue (GGR) for January will be 60% lower than it was last year.

Bernstein analysts Vitaly Umansky, Tianjiao Yu and Kelsey Zhu explain that VIP volumes across the first ten days of this month dropped “mid-70s of percent year-on-year,” but produced a “slightly-higher-than-normal win rate.” They added that mass-market GGR was down by around the “low 60s of percent year-on-year,” and assert, “Our currently-published estimates for 2021 GGR [are for] approximately 80 percent of 2019 GGR.” The ten-day period produced GGR of around $357 million, a 68% year-on-year decline, but a 13% improvement over last month’s results.