Tourism revival hopes for beaten casinos

China reopens border with Macau and resumes quarantine-free travel after drop in Covid cases

Reading time 1:59 min

As Macau slowly recovers from what has been its worst-ever Covid-19 outbreak yet, China announced it is resuming quarantine-free travel with the gaming hub, a move that could help boost casino revenues after months of hardship. According to local media reports, Macau’s border with the neighboring Chinese city of Zhuhai reopened at 6 pm on Wednesday, August 3.

The announcement came after Macau eliminated community transmission, meeting China's requirement for resuming quarantine-free travel. The borders between China and Macau have been closed since June 22, when Macau’s businesses first closed and a city-wide lockdown began. At the time, casinos had been allowed to remain open; however, as the outbreak worsened, casinos were also shut down for a two-week period.

During the outbreak, which began on June 18, the gaming hub reported more than 1,800 cases, the biggest flareup for the city, which has just 680,000 residents. In order to curb the outbreak, the government implemented a city-wide lockdown as well as multiple rounds of mass testing. Macau adheres to China's "Covid-zero" policy.

Quarantine-free travel is seen as key to recovery for the gaming industry, as the city feeds off the large flow of tourists from mainland China. The sector accounts for more than 80% of government revenue, with most people employed directly or indirectly by the casino resorts.

People entering Zhuhai from Macau will need to show a negative nucleic test result no older than 24 hours and inform community representatives in the location where they will stay of their travel history. They’ll then need to take another test within 48 hours of traveling to the city and are banned from taking public transport or attending gatherings within the first three days of their arrival, reports Bloomberg.

Due to its reliance on Chinese tourists, and its adherence to a Covid-zero strategy, the city has faced many challenges as of late, reporting recently an all-time gaming revenue low. The city posted July its worst month ever since records began in 2009, with gross gaming revenue falling 95% to 398 million patacas ($49 million), 98% lower than pre-pandemic levels.

The downturn has made the city lose its title as the top gambling hub to Las Vegas. The potential introduction of further measures including lockdowns and movement curbs, which have become increasingly challenged in the face of highly transmissible variants, may portend more pain to come, according to experts.

While Macau’s gaming revenue in 2019 was six times the size of the Las Vegas Strip, the situation has sharply changed. In the first six months of this year, Macau recorded $3.3 billion in gaming revenue, compared with $4 billion for Sin City.

Macau's six gaming operators have been burning through millions of dollars of cash a day and are facing a liquidity crunch. The companies are expected to post a US$500 million combined loss for the last quarter, their first since 2020, according to analysts surveyed by Bloomberg.

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