Macau’s gaming market was in doldrums even before the start of 2020, the situation, however, worsened after the Coronavirus outbreak in China. After the deadly virus hitting the country, Macau casinos have been facing a constant decline in revenue. February turned out to be the worst month as Casinos in the gaming capital saw around 88% drop in earnings. The virus continued to play havoc with Macau’s gross gaming revenue showing another massive drop of close to 80% in March.
As per the reports, analysts are predicting tough times for Macau’s economy as the gaming industry in the region is likely to witness an epic drop in profits when first-quarter earnings are released.
As per the Bloomberg survey, all the six operators in the world’s largest gaming market will combine for around 95% drop from Q1 of 2019. While the operators are already posting year-over-year drop in their EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), the numbers may be even more shocking when they come out with earnings reports in the coming few weeks.
With 80% tables reopened in mid-March, most of the casinos were operating in the region. However, China continued on its travel restrictions and as a result tourist arrivals fell 71% from a year ago.
While the casino operators want to lift the freeze on tourist visas, China has yet to announce a date for the same. Many renowned agencies of the world, including the International Monetary Fund, are projecting a contraction in Macau’s economy. The IMF is predicting around 29.6 % contraction in the economy in response to the impact COVID-19 has had on Macau’s economy.