Malaysia tightens travel restrictions as casinos pivot operations
New restrictions enforced by the Malaysian government will force the country’s leading casino operator to reduce its operations.
Calvin Ayre reports that Resorts World Genting will reduce operators from January 13 to January 26 due to a predicted decline in visitors due to COVID-19 related restrictions.
“Some of our hotels, facilities, attractions and other offerings will be subjected to revised operating hours, limited availability or temporary closure,” the resort said.
The new travel ban was announced on January 11, following a rise of new COVID-19 infections peaking at more than 3,000 a day.
The Movement Control Order calls for a freeze on travel between six states: Penang, Selangor, Federal Territories, Johor, Melaka and Sabah.
Ahead of the January 13 ban, the situation continued to worsen, with new infections hitting 3309 on January 12.
“The situation today is indeed very alarming,” Malaysian Prime Minister Muhyiddin Yassin said on Monday.
“Our healthcare system is under tremendous pressure now than at any other time since the start of the pandemic.
“As I have said before, unprecedented situations call for unprecedented measures.”
This comes just a week after analysts from Nomura showed their optimism for recovery in Malaysia.
Analysts were optimistic based on a healthy holiday period, but that optimism was built upon pent up demand and free travel in the country, with new restrictions blunting that optimism.
Resorts World Genting executives have always said this wasn’t going to be an easy recovery and when discussing their third quarter results, they noted the continuing difficulty of luring tourists as a reason to be pessimistic going forward and showed little optimism about the upcoming year.
Fitch Ratings reports on Asia-Pacific casino recovery
The casino gaming sector will improve in 2021 after the impacts of the coronavirus pandemic, according to a new report from Fitch Ratings.
GGR Asia reported in November that the analysts said gaming markets more reliant on local visitation will continue to recover faster, adding that any effects of the on-off closures due to local virus infections were likely to be “less active in 2021”.
Availability of vaccines would “allow destination markets like Singapore and Las Vegas to begin recovering more in earnest in second half 2021,” the ratings paper said.
The credit assessment institution also noted that cost cutting by casinos had meant that the impacts of the pandemic had been offset by healthy balance sheets.
Fitch Ratings said it maintained a negative outlook for a majority of its “rated gaming universe” because of the pandemic’s severe impact to casino operators and uncertainty regarding the sector’s recovery trajectory.
Discussing jurisdictions in the Asia-Pacific, Fitch noted that for the Macau casino market, although the city had an almost universal quarantine-free travel bubble with mainland China, current continued travel restrictions between Hong Kong and Macau were a “headwind”.
The institution said it was forecasting monthly revenue declines of 50 per cent to 60 per cent, year-on-year, through the first half of 2021, with accelerating growth in the second half, “led primarily by the premium mass segment.”
Fitch Ratings noted: “The eventual easing of travel to Hong Kong and potential availability of a vaccine drives our assumption for a strong second half 2021 performance relative to first half 2021.”
The financial institution observed that while Macau’s current six gaming licences expire in June 2022, the city’s chief executive Ho Iat Seng had a “multi-year extension option” in relation to the current rights.
“Fitch continues to believe the concession rebid process will be pragmatic,” said the credit rating agency, referring to an anticipated new public tender associated with the expiry of the current Macau gaming rights.