Macau Tourist Arrivals From China Plunge 80% in Blow for Casinos

(Bloomberg) -- China’s deadly virus outbreak is threatening the outlook for casino operators in the world’s largest gambling hub.

The number of mainland Chinese visitors to Macau fell 80% on Sunday, the third day of the holiday, compared with the equivalent day during last year’s Lunar New Year break, according to the city’s tourism office. For the first three days of the holiday, arrivals were down 66%, the data show.

That’s a blow for an economy which is reliant on the gambling industry, and comes after casinos suffered their worst year since 2015. The outlook is unlikely to get any better as China limits travel for its citizens, including overseas tour bans, amid the growing death toll caused by the novel coronavirus.

At least 80 people have died in mainland China from the virus, which started in Wuhan city, while confirmed cases have jumped to more than 2,700. Macau officials have extended school holidays until Feb. 10 to help stop the spread of the illness. There are now six confirmed cases in Macau.

Macau’s leader Ho Iat Seng said on Thursday that he couldn’t rule out closing all casinos in the city due to the disease outbreak, according to a Radio Television Hong Kong report.

Wynn Resorts Ltd. plunged 11% in U.S. trading last week, while Wynn Macau Ltd. sank 13% in Hong Kong. Sands China Ltd. dropped more than 8%. Hong Kong’s markets are closed for holidays until Wednesday.

President Xi Jinping last month during a visit to Macau praised the city’s government for maintaining stability while stressing the former Portuguese enclave needed to diversify its economy. Unlike restive Hong Kong, Macau has long been seen as more loyal to Communist Party rule. Gambling accounts for 80% of the local government’s annual revenue.

In China, box office sales plunged to about 6.1 million yuan ($883,000) over the first three days of the holiday, compared with 2.3 billion yuan in the year-earlier period, according to Maoyan Movie data. Cinema operators including Dadi Cinema, Jinyi Cinemas and the local affiliate of CJ CGV Co. announced last week they were halting operations January 24 through January 27.

--With assistance from Shirley Zhao.

To contact the reporter on this story: Richard Frost in Hong Kong at rfrost4@bloomberg.net

To contact the editors responsible for this story: Paul Dobson at pdobson2@bloomberg.net, Kazunori Takada

©2020 Bloomberg L.P.