The global leader in financial services, JP Morgan, reevaluated the expectations for Macau’s gaming operators for the first quarter of 2023, a report released by IAG reveals.
Operators in Macau Expected to Start Economic Recovery This Year
DS Kim, an analyst for JP Morgan, explained that the company anticipates seeing the non-gaming GGR start its recovery soon. The analyst explained that GGR within the sector is expected to return to pre-pandemic levels of 2019 and this may happen at some point during the second half of 2023. Kim outlined that this expectation is ahead of the initial predictions for the recovery of the sector in mid-2024.
The company acknowledged that the revision comes after traveling restrictions between Macau, China and Hong Kong were lifted. As of January 8, Macau – Hong Kong ferry services have resumed their operations. Moreover, visitors of the SAR from Taiwan or Hong Kong no longer need to enter by providing a negative COVID-19 test, which further eases traveling in the region. Perhaps most importantly, Macau visitors are no longer subject to quarantine, making traveling even easier.
In that line of thought, Kim acknowledged the changes in the region as significantly positive. Finally, the analyst explained that it is normal to see restrictions being lifted which marks the path toward the resumption of normal operations for operators in the region.
Uncertainties Continue to Impact Macau
The latest announcement comes amid a difficult period for Macau. The number of junket operators in the region has been continuously declining. The once profitable activity which used to rake millions sees fewer operators receiving a license and for 2023, that number has decreased to 36. In comparison, only a year earlier, the number of junkets was 46, while back in 2019, there were 100 licensed junket gaming operators.
On the other hand, recently, Macau said it expects to see some 40,000 visitors daily. Yet, the numbers of the three-day New Year’s visitation disappointed. The average number of tourists was just under 21,000, which is significantly less than the targeted 40,000 visitors daily.
Still, considering the lifting of more restrictions, it is not unlikely for the industry to at least begin its economic recovery this year. What’s more, major industry operators have already confirmed plans to introduce non-gaming amenities in an effort to boost visitation.
One such operator is Wynn Macau. Upon announcing that 98% of its workforce will benefit from special allowance, the company also confirmed it will “commence significant efforts to implement non-gaming attractions and introduce visitors from new markets.” This is only one method that the operators can use to boost their visitation and increase their revenues in the region.