Resumption of IVS may be slow to show results for Macau’s beleaguered Casino Industry
Macau, the world’s leading casino hub, recently announced the resumption of the widely-popular Individual Visit Scheme (IVS) that was put under suspension in wake of the outbreak of the deadly corona virus pandemic. While casino operators are optimistic that the move would help them swing back to profitability, some analysts have warned that the resumption of the visa scheme would be slow to show results.
The resumption of the IVS program means there will be no limits on the number of Chinese residents visiting Macau, the Special Administrative Region of mainland China. Residents of Zhuhai, Guangdong Province and the Mainland China are being invited to apply for IVS as part of the government’s efforts to provide a much-needed boost to Macau’s gaming-based economy.
It may be noted here that Macau’s economy is mainly relying on gaming revenue generated by casinos, which depend on national and international tourists. The outbreak of COVID-19 pandemic led to thousands of deaths all over the world, forcing authorities to issue closure orders for all non-essential businesses like casinos that remained shuttered for months. The closure of the casinos not only affected the operators and employees but also created problems for local governments as they lost their tax revenue streams.
Ho Iat Seng, Chief Executive of the SAR, acknowledged the fact that the casino hub continued to face great economic problems along with increasing unemployment due to lack of visitors. While the authorities see the resumption of IVS as a step forward to boost Macau’s struggling casino-based economy, analysts like Ben Lee thinks differently. Lee is a senior analyst at gaming consultancy firm IGamix.
Warning that recovery will not come quickly, Lee said, “It will be a great help for Macau. It is great news, but it will be a long way to reach the level of the results of 2019.”
Brokerage Sanford Bernstein admitted that resumption of IVS would surely contribute to Macau’s economic recovery but its impact on the casino hub’s gross gaming revenue in the short-run would be quite limited.
Mainland Chinese tourists are most concerned about contracting corona virus. In a recent survey, nearly 58% of respondents indicated they didn’t want to catch Covid-19, while 46% said they were afraid of being stuck abroad. More than 50% of respondents said they had no plans to pay a visit to Macau in the coming six months.