Macau Shuts Down for a Day over Typhoon Concerns

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Macau's major casinos and transportation services, halted due to the threat of Typhoon Saola, have resumed operations. The shutdown was short-lived, but may have signaled a slowdown in gaming revenue for September.

Subsequent Developments

An order was issued on Friday evening by Chief Executive Ho Iat Seng directing all casinos to halt operations if typhoon signals exceeded T8. Following this, a T9 typhoon signal was announced, leading to the comprehensive shutdown of the city's casinos and key transportation links.

As Typhoon Saola's threat lessened, by 6 AM on Saturday, the typhoon signal was downgraded to T8. Consequently, Macau's casinos started operations around 8 AM. The Qingmao Boundary Control Point and the Zhuhai-Macau border gate reopened at 9 AM. By 2 PM, both the Hong Kong-Zhuhai-Macau Bridge and the Hengin border checkpoints were operational.

Related: Macau GGR Continues to See Significant Improvements

Passenger ferry services between Hong Kong and Macau, which were suspended due to a T8 signal last Thursday, resumed their operations at 5 PM on Saturday. As of the report's publishing, Inside Asian Gaming had reached out to all six Macau concessionaires for updates on the operational status of services and potential damages but awaited official responses.

For context, Typhoon Hato, which impacted Macau on 23 August 2017, resulted in significant casualties and economic damage. Ten fatalities were reported, and the economic toll reached nearly MOP11.5 billion (US$1.42 billion), according to government sources.

Anticipated Downturn in September Revenue after Casino Closures

After the temporary closure of Macau's casinos due to Typhoon Saola, analysts project a subdued revenue for September. JP Morgan's investment bank reveals that Macau's mass gaming revenues have almost recovered to pre-COVID-19 levels, reaching 93% to 94%. The driving force behind this resurgence is the premium mass segment, outpacing 2019 figures.

August marked a significant uptick for Macau, as reported by analysts DS Kim, Mufan Shi, and Selina Li. Since the January border reopening, the city witnessed its highest gross gaming revenue (GGR) of approximately $2.1 billion. This impressive figure represents average daily revenue of about $71 million, or 71% of the rates seen in 2019.

The surge is predominantly attributed to the premium mass segment, which astonishingly achieved 110% of its performance before the COVID-19 pandemic. On the other hand, the base mass sector is currently fluctuating between 75% and 80% of its former levels. Meanwhile, the VIP segment, driven mainly by premium direct, is hovering around 28% to 29%.

Looking forward, the industry is keenly anticipating the October Golden Week. However, JP Morgan has issued a word of caution, predicting a potential decline in September's revenue. This downturn is expected due to a combination of seasonal transitions and the aftermath of Typhoon Saola.

While the October Golden Week traditionally sees Macau's casinos operating at full capacity, the uncertainty lies in the spending habits of its guests. With the Chinese patrons' unpredictable booking and spending behaviors, forecasting exact revenue outcomes remains a challenge.