For the first time since January, tourists from mainland China will be able to visit Macau starting later this week. The news, announced in a Monday press conference, sent some U.S. gaming stocks soaring to their highest levels in more than a month. Companies and traders reacted to what they saw as possibly the first step toward a larger reopening plan. For their part, Macau officials were very clear this is a trial run of sorts. It only includes tourists, both individuals and groups, from the neighboring city of Zhuhai in Guangdong province. As of Aug. 12, they will be allowed to visit Macau casinos again.
“Our economy needs tourists,” Macau’s Secretary for Social Affairs Ao Ieong U said in the press conference. “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.”
On July 15, Chinese officials announced Guangdong residents would be allowed to travel to Macau for business purposes or to visit family. With no reported COVID-19 cases as a result of that, Ieong U said it was time to test tourist visits. She added that Chinese residents make up more than 90 percent of Macau’s tourists. All tourists had been banned from Macau since January in order to stop the COVID-19 spread, effectively shutting down the area’s casino industry.
Gaming Companies Look To Macau For Relief
The shutdown also caused a hit for companies like MGM that operate properties in Macau. Net revenue from MGM’s Chinese properties dropped 95 percent in the second quarter, according to the company’s July 30 report. Overall, MGM revenue dropped 91 percent over the same period, with $290 million coming in for the three months that ended June 30. By comparison, MGM brought in $3.2 billion during the same period in 2019. The stock numbers also haven’t looked great, with MGM dropping 43 percent this year. On Monday, that changed. MGM’s stock bumped due to the Macau news, climbing 13.83 percent to $21.65 per share. Macau’s reopening was actually the second bit of positive news for the casino chain. On Monday morning, IAC bought a 12 percent share of the company. That deal was valued at $1 billion.
Other companies also benefited from Macau’s announcement. Las Vegas Sands stock rose 7.51 percent to finish at $47.52 for the day. It marked the first hike in more than a month for Sands, whose stock has dropped 36 percent since the beginning of the year. Sands chairman Sheldon Adelson said the news was a sign things are looking up.
“I am pleased to say that the early stages of the recovery process from the Covid-19 pandemic in each of our markets is now underway,” Adelson said in a statement to media.
Last week, Sands reported $98 million net revenue for the second quarter, a decrease of 97.1 percent from 2019. The company pulled in a net loss of $985 million in the second quarter, compared to a net income of $1.11 billion last year.
Wynn International also saw their stock rise after the press conference. Wynn stock climbed 9.96 percent to $81.48 overall as trading closed.