Initial reports of Coronavirus, a respiratory illness, shocked the world. The new illness first appeared in Wuhan, located in the Hubei Province of China. But no sooner had the existence of the Coronavirus been declared than roughly 360 deaths were already attributed to its appearance. More shocking is that an additional 20,000 were infected, raising red flags, and forcing travel bans.
Macau is one major region in which a travel ban has been implemented, turning its casino games and casino floors into veritable ghost towns.
Chinese New Year Crushed
The discovery of Coronavirus also happened to coincide with the Chinese New Year, which is normally the strongest financial quarter of the local casino industry. But with travel bans in place, the busiest holiday was all but entirely robbed of positive impact. The Macau Tourism Office confirmed what was already obvious; travel into the region had been almost non-existent, dropping by more than 80%.
Naturally, the impact on revenue for the month, and the year, is going to be devastating, with some even suggesting that the predicted 60% drop in casino GGR is conservative.
As it stands, January has already been a disaster. GGR sat at $2.76 billion, which is a drastic 11.3 decline from the previous year. But, of course, the full impact of the virus had not yet even been felt.
A Hard Year Ahead
Analyst Sanford B. Bernstein put forward the 60% decline prediction, although quickly pointed out how difficult a prediction it was to make.
But JPMorgan made a similar prediction, suggesting that the decline would be between 50% - 60%. But the JPMorgan analyst added that it was impossible to determine when the travel ban would be lifted, making the numbers highly questionable.
Either way, neither Bernstein nor JPMorgan were willing to alter their end of year casino industry GGR predictions. But it is still clearly a difficult time for the casino industry in Macau, with the virus impact likely to have far reaching consequences. Even when the travel ban has been lifted, it will likely take weeks, or even months, before business returns to normal.