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Part 3 : Dealing with the pandemic ICE365 Macau report
But with visitation from the mainland curtailed , revenue plummeted . “ Through these measures [ Macau ] has been absolutely effective in limiting Covid-19 , but as result visitation has been severely restricted , and gaming revenue is around 45 % of what it was in 2019 ,” Tash says .
Following an 11.3 % decline in January 2020 , gaming revenue dropped 87.8 % to MOP3.10bn in February . The yearon-year declines continued to mount . Between April and September , revenue was down by more than 90 %, reaching a nadir in June , for which a 97.0 % drop from 2019 , to MOP716m , was recorded . It was not until May 2021 that Macau ’ s revenue surpassed MOP10bn once again .
Sands China chief operating officer Grant Chum said in January this year that there had been signs of recovery , driven by premium mass and luxury retail , in the fourth quarter of 2020 . “ In December , we had a very encouraging month , especially the holiday season . We reached over 50 % hotel occupancy during the month . [ In ] the peak days , we were achieving 8,500-9,000 room nights , which obviously we haven ’ t done anywhere close to that since January .
“ And if you look at the pace of recovery in retail , the luxury retail sales really took off during the quarter . And by December , Four Seasons ’ retail mall was up 16 % over the prior year . Actually , we had the best ever month that we ever had in Four Seasons mall tenant sales . So that ’ s pre- and post-pandemic , a record month .”
“ As long as the border with mainland China remains open , Macau could ‘ go on for years ’ without international visitors ”
“ There is just not sufficient visitation to power all segments of the business and to replace the volumes that we lost ,” he added , however . “ So the base mass remains very subdued . Macao only had 20 % of the prior year ’ s visitations during the fourth quarter .”
This had a significant impact on licensees ’ performance . SJM Holdings , the subsidiary of SDTM , posted a net loss of HK $ 3.03bn (£ 276.0m /€ 321.3m /$ 390.4m ) for 2020 . Sands , operator of five casinos , saw losses reach HK $ 1.52bn . Melco Resorts & Entertainment ’ s full-year loss hit US $ 1.26bn .
Vegas , faced with a similar situation , significantly reduced its workforce . Clark County , where Las Vegas is located , saw its unemployment rate spike at 33.3 % in April 2020 , compared to 4.0 % for the same month in 2019 . Fast forward to June 2021 , and one of the biggest challenges facing Nevada ’ s casinos is increasing their employee headcount to fulfil demand .
Macau did not have this problem , with the government blocking operators from laying off local staff .
“ The government would not allow
them to do that , and as the 20-year gaming licences are about to expire in 2022 , they couldn ’ t risk not complying ,” Tash says . “ So not only were the casinos prevented from laying off locals , but they were required to give them bonuses early this year . And the government did the right thing .
“ This means that when they reopen they have staff ready to come back in , rather than having to rehire and retrain staff as we are seeing in other jurisdictions .”
This does put an extra financial burden on the industry , however . Properties have been estimated as losing up to US $ 15m per day as a result of the shutdown and subsequent slowdown in Macau .
Despite this , construction plans continue unabated . Two properties are scheduled to open this year . Sands China , for example , is executing a $ 2.2bn capital investment programme to convert Sands Cotai Central into The Londoner Macao – a venue themed around the English capital – The Grand Suites at Four Seasons and the Londoner Court .
“ The group believes these capital
ICE365 Macau report