An Investors Approach to Macau Illuminates the Path Towards Recovery

Published January 25, 2021 by Lee R

An Investors Approach to Macau Illuminates the Path Towards Recovery

A Macau recovery this year is difficult, but realistic according to current environmental trends.

Beyond the desperate-looking rush to revive Macau, the longer term prospects remain firmly rooted in investment data.

Recovery Prospects

Assessing the long-term investment prospects of the region and it's holdings, a Sanford C Bernstein Ltd. Brokerage memo points investor focus towards the prospects of “recovery in second half 2021 and rebound in 2022 with respect to potential normal operating environment and stock price performance.”

VIP Junket Status

A former key source of revenue has remained elusive, with analysts Vitaly Umanksy, Tianjiao Yu and Kelsey Zhu concur that junket VIP play could “continue to face significant headwinds in 2021 and into 2022.”

Prevailing Junket Concerns

The three pundits point out factors unrelated to COVID that were already impeding the tours before COVID, including increased scrutiny of money transfers along with “customer and agent concerns about dealing with junkets.”

Re-Starting Tourism?

Another barrier to recovery is the lack of tourists coming from mainland China–even with a relatively quarantine-free hub established between the mainland and the administrative region.

Lingering impediments on free movement includes the need for visitors to show proof on arrival of a negative Covid test; and “continued suspension” by the mainland authorities of group-tour visas for Macau trips.

Private Economy Recovered

Health advisories urging people not to travel represent the additional and obvious Covid-related impediment to earning in Macau as well—though China's consumers are returning to normal spending levels.

Hong Kong Visitors?

A bubble with 10 to 15 percent GGR contributor Hong Kong requires 14 days for the whole region without a Covid-19 infection case, leaving Sanford Bernstein to predict a Macau-Hong Kong bubble unlikely before Q2.

GGR Recovery Forecast

However, if travel restrictions can dissolve by H2, the brokerage forecasts Macau's GGR to 2021 to approximate two-thirds of 2019’s MOP292.46-billion (US$36.6-billion) level—representing a 225 percent year-on-year improvement on 2020.

VIP, Mass Gambling Recovery

The mass-gambling segment in 2021 is estimated to reach up to 75 percent of 2019 levels, with VIP reaching 50 percent of 2019 totals.


With Sanford Bernstein forecasting January GGR in the “low- to mid-60s of percent” of January 2020 as the last strong trading month before the pandemic, effectively controlling the spread of Covid could make this January the launch of a true year of recovery to 2019 levels.

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