Posted on: August 10, 2020, 09:09h.
Last updated on: August 10, 2020, 09:17h.
Las Vegas Sands (NYSE:LVS) and Wynn Resorts (NASDAQ:WYNN) are among the gaming equities with Macau exposure rallying Monday on news that at least one city in mainland China will resume issuing tourist visas allowing travelers to access the world’s largest casino center.
In midday trading, LVS – the operator of five Macau integrated resorts – and the Wynn Macau and Wynn Palace owner are up more than seven percent and eight percent, respectively, after the city of Zhuhai in Guagndong province got the green light to resume issuing tourist permits for Macau visits. Touching off the surge in gaming equities is speculation that that move sets the stage for broader resumption of the individual visit scheme (IVS) visas.
Macau’s Secretary for Social Affairs and Culture Ao Ieong U said earlier Monday that Zhuai restart issuing individual and group tourist visas for residents of mainland China on Aug. 12.
By resuming Zhuhai visas first, we will monitor the situation and see if we could strive to achieve more convenience for residents in Guangdong or other places to come to Macau,” she said at a press conference.
Adding to the ebullience for LVS, Wynn and Melco Resorts & Entertainment (NASDAQ:MLCO), which is higher by almost nine percent, is news that a two-week quarantine requirement on travelers arriving from Macau to the mainland will be scrapped on Aug. 12. Guangdong province ended a similar policy last month.
Good News Mounting
In less than a month, Guangdong did away with its healthcare seclusion policy, Beijing signed off on visas for academic, corporate and family visits to Macau and, today, Zhuhai joined the party with the tourist permit news.
The headlines emerge after several months of gross gaming revenue (GGR) declines in excess of 90 percent in Macau and as operators are trying to bring new amenities online, efforts stymied by the lack of visitors to the special administrative region (SAR). For example, LVS recently said it’s waiting for more travelers to return to Macau before unveiling its Londoner integrated resort.
Sands China President Dr. Wilfred Wong said the Londoner renovations will be completed in the current quarter, but the operator is waiting for travel to Macau to gain steam before unveiling the highly anticipated property. The Londoner – a UK-themed integrated – is a $1.35 billion rebranding of Sands Cotai Central.
“The hotel occupancy rate is still low. The Londoner Macao’s rooms and facilities will be ready in the third quarter, but it won’t help drive the company’s performance as visitor numbers remain at a very low level,” said Wang at the Sands Shopping Carnival at Cotai Expo last week.
Why It’s Important
The IVS is the visa primarily used by residents of mainland China to access to Macau. Roughly half of arrivals to the special administrative region (SAR) last year came by way of IVS, a percentage that is significantly regarding Guangdong province
“Even though Guangdong Province has removed mandatory quarantine on visitors returning from Macau from 15 July, the number of visitors only increased very slightly because IVS has not yet resumed,” said Wang.
Executives throughout the industry are of the mind that as one region reissues IVS permits and the coronavirus remains contained in Macau, other areas will follow suit and loosen travel controls. The gaming center hasn’t reported a new COVID-19 case since late June.