Macau, the gambling capital of the world, saw gambling revenue plunge 11.3 percent in January year-on-year as the raging Novel coronavirus (2019-nCoV) outbreak scared away Chinese from mainland China and Hong Kong that are its biggest spenders. Local authorities fear the worst is yet to come.
Gambling tourism is Macau's single largest source of revenue, comprising more than half the economy. More than 70 percent of the visitors to Macau come from mainland China, which is the country hardest hit by the coronavirus outbreak. The outbreak began December 2019 in Wuhan, capital of Hubei province.
Confirmed reports say the usually bustling and packed special administrative region is now a virtual ghost town after local authorities imposed travel restrictions that kept tourists away. The restrictions are part of the effort to contain the spread of 2019-nCoV, also known as the Wuhan coronavirus. Macau welcomed 27.5 million Chinese visitors in 2019, second only behind Hong Kong's 49 million Chinese visitors.
Macau confirmed its first case of pneumonia caused by the coronavirus on January 19. Since then, a total of seven people in Macau are confirmed to have been infected by the disease as of Feb. 1.
The end result of these harsh precautions is a massive plunge of $2.76 billion in gambling revenues for January. Analysts said this was worse than the two percent reduction they were expecting. The Public Security Force said Macau recorded an over 80% drop in the number of daily visitor arrivals since January 24, which was the day before the beginning of the lunar New Year.
Between Jan. 24 and Jan. 30, Macau reported fewer than 150,000 visitor arrivals from mainland China, a plunge of 83.3%. On Jan. 30 alone, a massive plunge of 93 % was recorded, with only 9,664 mainland visitors arriving in Macau.
As a consequence, some analysts forecast a plunge of at least 30% in Macau gambling revenues for as long as visitor restrictions implemented last week remain in place. In addition to this move, the local government has curbed transport links with mainland China.
The Macau government's measures against the 2019-nCoV outbreak will strong affect Macau's cash flow, said Fitch Ratings in a report released Friday.
The coronavirus outbreak will also inflict even more pain on Macau's struggling economy. Macau's GDP shrank 4.5% year-on-year in the third quarter of 2019, following a revised 1.8% drop in the second quarter. Q3 was the third consecutive quarter of contraction.
Macau's revenue from gaming and gambling in 2018 stood at $37.59 billion. It came to $32,98 billion in 2017 and $28.04 in 2016.
