Several factors are contributing to the slowdown in Macau’s casino industry recovery. Andrew Klebanow and Lawrence Chen, C3 Gaming principals, catalog the issues and forecast Macau’s outlook.
Klebanow reviews how circumstances arising from the pandemic have hindered gamblers fromreturning Macau to its pre-pandemic success. Travel restrictions – including mandatory negative testing requirements, and quarantines for visitors – to support China’s Zero-Covid policy, have naturally curbed gaming traffic. In his recent articleThe Return of Punters to Macau? Published In the April edition ofIAG Magazine, Klebanow details how the highly contagious Omicron variant shut down optimism in a 2022 return to normal. The faltering recovery halted once again.
On top of Covid restrictions, a prominent junket provider executive’s arrest dominoed into closures of junket rooms that may never re-open. Since junkets used to make up 70% of Macau’s revenue, this development further stalls recovery. Along with Lawrence Chen, Klebanow wroteThe Long Road Back, an article published in the May edition ofGlobal Gaming Business Magazine, reviewing how pre-pandemic revenue was generated and forecasting where revenue will be distributed post-pandemic. In their analysis, Klebanow and Chen looked at hotel occupancy, the travel blacklist, debt service, as well as the loss of junket revenue to make their predictions. Though Macau’s casino industry is currently in crisis, historic data suggests that may not always be the case – having bounced back from the 2010 financial crisis, Klebanow and Chen are confident that Macau will bounce back again in a different configuration.
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