Macau’s local gaming and tourism sector could recover quickly after relaxation of travel restrictions

Macao SAR’s tourism market could experience a Las Vegas-like recovery after the lifting of travel restrictions, given existing pent-up demand, gaming and aviation industry representatives said.

The Macau Chamber of Commerce (FMCC) held a webinar today featuring Andrew Klebanow, Co-Founder and Senior Partner of C3 Gaming, and Celia Lao, General Manager of Greater China for Air Asia. The webinar was moderated by Mary Mendoza, CEO of The Platinum and Chair of the FMCC Tourism and Leisure Committee.

During the webinar, Klebanow outlined Las Vegas’ recovery path since the full lifting of pandemic restrictions last year.

The total gross gaming revenue generated by Macau’s SAR sector this month has stood at just around MOP 200 million ($24.8 million), heavily affected by the recent community outbreak in the city and suspension of activity from casinos for 12 days.

In May of this year, reported gambling winnings by Las Vegas operators reached $1.3 billion, up 5.71% year-on-year, and also marking the 15th month in a row in which they exceeded 1,000. million dollars, according to the Nevada Gaming Control Board.

At the same time, gaming revenues this May have surpassed pre-pandemic levels, and gaming revenues in the region have broken not only state records, but national ones as well.

Klebanow noted that after Nevada Gov. Steve Sisolak ordered the lifting of all statewide restrictions except face coverings on June 1, 2021, it was as if “someone flipped a switch.”

“Tourism picked up, and I’m not talking about a slow and predictable pace, but literally, overnight business was back,” he said.

Other variants also did not dent tourism levels, and Las Vegas casinos, apart from some pandemic prevention requirements, such as temperature checks at the entrance and the reduction of gambling capacity, basically applied an attitude of “change nothing” to “get back to normal as soon as possible”.

Las Vegas operators’ reported gambling winnings reached $1.3 billion, up 5.71% year-on-year

Aircraft movements at Las Vegas’ Harry Reid Airport also gradually recovered to record May 2022 as the third busiest month in history, while hotel occupancy recovered almost immediately and is currently around 80%. .

“Once the vaccines started to become widely available in March 2021, people felt very comfortable going out again and there was this pent-up demand for entertainment, to just get out of the house or out of town to a casino and get away.” , he pointed.

“I think that’s what you can expect from Macau, there’s going to be a lot of pent-up demand. I can’t say when it will start, but it will come. When the casinos opened, patrons came flooding back, not just in Las Vegas but in all gaming jurisdictions.

At the same time, Celia Lao noted that Air Asia had everything in place to immediately restore existing pre-pandemic air connections to Macau as soon as restrictions were eased.

“Actually, we were operating 81 flights to Macau before Covid, so we can resume all these flights pretty quickly. We still have team members in Macau and all these infrastructures are already built, we also have all the approvals. The moment the border opens, we will be able to resume operations,” Lao said.

“Some of the cities and countries in the region – Singapore, Malaysia and Thailand – have already opened up with some pandemic policies from last year, and then with no restrictions from April this year. It’s a process, but we’re getting ready. We already have experience with the countries of Southeast Asia, and we have already resumed flights to Hong Kong, right next door.”

Data provided by Ms. Lao showed that global airline capacity reached around 20% of 2019 levels in 2020, but domestic and international air traffic managed to recover from 43.4 million and 12.2 million, respectively. , until 2020, to 65.2 million and 36.8 million in 2022.

The Air Asia representative also noted that the aviation group held talks with Macau aviation authorities to prepare offers that will resume when restrictions are lifted.

We can look at the routes that we have resumed in Hong Kong, we have resumed three routes from Kuala Lumpur, Bangkok and Manila to Hong Kong. These are key routes that we can also see in Macau,” Lao said.
However, Klebanow warned that one of the biggest changes the SAR will face will be replenishing its pool of contracted expatriate talent, following the last two years of pandemic restrictions.

“It will probably be their biggest problem, expats have gone home and are very reluctant to come back. I have colleagues who worked in Macau for 15 years, they came back last year and said they were done,” he noted.

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“You will have a hard time getting those people back. My suggestion is to start designing a plan in this regard and study what it will cost to get those employees back in a hurry when the business recovers»

When asked about the tightening control central and local authorities are exerting over the gaming sector in Macau, whether it is due to the increased supervision of capital flows out of the country or the new gaming amendment, Klebanow pointed out that gambling remains one of the main attractions the city has to offer.

The Air Asia representative also noted that the aviation group held talks with Macau aviation authorities to prepare offers that will resume when restrictions are lifted.

“I understand the pressure from the central government to reposition Macau as a major entertainment destination, but I also understand that Macau is the only place in the PRC where you can go gaming, which is quite an attractive position in the market. », he declared.

“Yes, casino and gaming operators will change their services, add rooms, add entertainment and add a variety of non-gaming services to broaden their appeal, but there is no denying the fact that Macau has a unique attribute that no another city in China has»

Regarding the reduction in income to operate due to the disappearance of the role of junket operators in the Macau market, the gaming consultant pointed out that, although “it is certainly a great loss, the premium mass will allow better profit margins for the dealers”.

Article republished under an agreement with Macau Business to share content. Link to original article: https://www.macaubusiness.com/local-gaming-and-tourism-sector-could-bounce-back-quickly-after-travel-restrictions-are-eased-sector-reps/