According to an analyst at investment bank Jeffries Group, the Macau gaming industry may not see stable financial results until 2023.
The sector has suffered significant losses as a result of an increase in Covid-19 cases, which has resulted in the government imposing strict travel restrictions and ordering businesses to close.
The consequences have been far-reaching, with unemployment reaching levels not seen since 2009.
Macau’s Gaming Inspection and Coordination Bureau reported earlier this month that gross gaming revenue (GGR) fell 95% year on year in July, the worst monthly result since the pandemic began.
The region generated MOP$398m (US$49.3m) in GGR for the month, representing an 84% decrease from June.
According to analyst Andrew Lee, the region will not fully recover until 2023, with Macau visitor numbers expected to remain low due to fears of additional quarantine measures.
His forecast exceeds that of IGamiX Management & Consulting Managing Partner Ben Lee, who predicted the bleak July results and predicted a similar outcome for August.
Casinos reopened in July, but with strict operational restrictions, including staff and guest capacity limits. Travel between Macau and mainland China remains restricted, with efforts being made to severely limit the number of guests and visitors.
The impact of pandemic restrictions has been reflected in the region’s Q2 results. MGM China’s revenue fell 46%, Melco Resorts’ revenue fell 48%, and Studio City International Holdings reported revenue of “negative $1.9m.”
The pandemic is still having “a material effect on our operations, financial position, and future prospects into the third quarter of 2022,” according to Studio City.