CHINA (MACAU). Travel retailers and gaming operators in Macau received a big boost today after the Macau SAR Government announced that the Individual Visit Scheme (IVS) will resume for residents of neighbouring Zhuhai in Guangdong Province from this Wednesday, 12 August. The IVS was suspended in late January as the COVID-19 outbreak escalated in China.
Secretary for Social Affairs and Culture Ao Ieong U told a press conference today that both IVS and group visas will resume this week. However, she warned that should Macau report a single locally transmitted case, the IVS would be suspended immediately and quarantine measures reintroduced.
Casino trade title Inside Gaming Asia (IGA) reported that the government was in communication with Mainland authorities and hoped to extend IVS to the rest of Guangdong Province and eventually other Mainland provinces in the near future.
IGA described the return of IVS as the single most important step in the recovery of Macau’s gross gaming revenue [and therefore the travel retail sector -Ed]. The visas accounted for around 48% of all Chinese visitors to Macau in 2019. Likewise, 72% of Mainland Chinese visitors to Macau last year were from Guangdong Province.
Fellow trade title GGRAsia quoted a note from brokerage Sanford C. Bernstein, which said: “The direct impact on [Macau’s] gross gaming revenue (GGR) from the Zhuhai IVS restart will likely be limited (perhaps adding a few percentage points to GGR recovery from current levels) once the full process occurs.”
Sanford Bernstein said that other cities in Guangdong province are expected to resume IVS and package tour visa issuance to Macau “either later this month or in September”.
GGRAsia also quoted analysts Vitaly Umansky, Tianjiao Yu and Kelsey Zhu, which said: “The restart of IVS and group visa issuance… is another baby step in the right direction as [Mainland] China and Macau slowly loosen travel between the two jurisdictions.”That would be a huge boost for casino operators, hoteliers, travel retailers such as DFS Group, Duty Free Americas, King Power Group (HK), Sky Connection/The Shilla Duty Free and other tourism sector stakeholders. Sanford Bernstein said that Guangdong province was a “key feeder market” for Macau’s casino industry, estimating that Guangdong residents represented some 40% of mass GGR market-wide in Macau pre-COVID-19, and for 15-20%-plus of VIP GGR.
Importantly, Ms Ao also revealed that, from Wednesday, visitors entering Mainland China from Macau will be able to travel to all provinces nationwide, IGA reported. Previously they had been required to remain within Guangdong Province for 14 days.