The power of decision does not belong to Macao
In the analyst universe, a decline in gaming revenues is already expected in 2022, when 2021 represented growth. Now, it is thought that revenues could approach the values recorded in 2020, the first year of the pandemic, with the results of these summer months approaching zero.
Even before the virus returned, Macao closed the first half of 2022 with frankly disappointing results – worse than last year. Summer promised, but today we know that entering the second semester will be even worse, as the virus insists on leaving the city. The “zero cases” policy is doing an authentic cleaning of small and medium-sized local companies, and once again prevents large events from being held on the scheduled dates. The MICE industry, one of the solutions presented to start economic diversification, is one of the most affected by the intolerance to the virus.
At the same time, this is the policy that has allowed us to keep our borders open with Mainland China, which has always been Macao’s biggest tourist market, and today is the only one. This circumstance does not give the city much room for manoeuvre. Even if it had the freedom to adopt a new stance in the face of the pandemic, it was never known how to internationalize, focusing on a market that, even without the presence of the virus, becomes increasingly unsympathetic to the great brand of the MSAR – the game.
Nor does Hong Kong present itself as a short-term possibility. A market that once accounted for 18.7 percent of Macao arrivals is also battling an outbreak that seems to have no end. The special corridor with the neighboring city is seen further and further away. The timing for these negotiations freezes whenever one suffers from Covid-19 and at the moment both suffer. Two and a half years after the pandemic entered our lives, a solution that defends the interests of both regions has not yet been found. But the MSAR needs this market to overcome the difficulties felt by restrictions on the Continent. On the other hand, even if Macao quickly and effectively controls the current outbreak, it is highly likely that more will appear during the year, either here or in Mainland China.
The outbreaks in the interior, by the way, were the main contributors to the bad results of the first semester. So, it doesn’t matter the planning and the steps taken to relax the borders, because in the end, the only certainty we have is that the setback is guaranteed in case there is an outbreak. The way out of this dark scenario does not depend on Macau, even if it had the power to decide.
The economic recovery is in Beijing’s hands, and the current direction will only change when the virus no longer poses a threat to the Central Government. And in this matter there is no vote, no date. A review of the 2022 Budget Law in Macau is promised in the second semester, we will see what revenues are expected and what we actually achieved at the end of the year.
*Executive Director of PLATFORMA