Lunar New Year Visitors to Gambling Hub Macau Screened for Coronavirus
January 28 2020 - 6:04PM
Dow Jones News
By Katherine Sayre
Seven people in the world's gambling capital of Macau had been
infected with the deadly new coronavirus by Tuesday, casting
uncertainty over what is usually the busy two weeks of the Lunar
New Year season for casinos in the region.
The Macau government said Monday it planned to contact about
1,100 tourists visiting from Hubei province, where the outbreak is
believed to have originated, for testing. Travelers arriving in
Macau who had been in Hubei in the last two weeks must have medical
documentation proving they aren't infected, or they will be denied
entry, the government said.
Global fears over coronavirus in Macau and mainland China have
sent U.S.-based casino operators' stock down along with other
stocks.
Las Vegas Sands Corp., Wynn Resorts Ltd. and MGM Resorts
International have huge resorts in the region, which generate up to
70% of revenue for the companies. Between Jan. 17 and Tuesday,
stocks were down 10% for MGM Resorts, 13% for Las Vegas Sands and
18% for Wynn Resorts.
The full impact on casinos depends on how long it takes world
health leaders to get the disease under control, according to
analysts. The Macau government said last week that closing the
casinos temporarily hasn't been ruled out.
"News is likely to be bleaker before it turns brighter, and
stocks will remain under pressure and likely volatile," Vitaly
Umansky, senior research analyst at Sanford C Bernstein in Hong
Kong, in a note last week.
The Lunar New Year season began Saturday. About seven million
people flocked to Macau in January and February last year, an
increase of 20% from 2018, thanks to the opening of a 34-mile sea
bridge connecting Hong Kong, Macau and China's Guangdong
province.
Visitors from mainland China account for more than 70% of the
people who travel to Macau, the only place in China where casinos
are allowed, while another 19% visit from Hong Kong.
By Friday, no widespread trip cancellations in Macau were
apparent, according to analysts, who added that tourists are likely
to postpone their trips to Macau rather than cancel altogether,
creating some pent-up demand later. The Macau government canceled
its new year parade, which had been scheduled for Monday, and other
public events. Casino dealers and other staff have been ordered to
wear masks.
Analysts said the coronavirus can be compared with previous
disease outbreaks such as SARS in 2002 that were limited events,
but in this case, information about the disease and the response is
more widely available.
The outbreak has worsened quicker than expected, creating a
challenge for Macau in the coming few weeks, but the overall impact
is likely to be temporary, said John DeCree, Union Gaming's global
head of institutional research. "We think there will be a
compelling buying opportunity for the sector when things are under
control," Mr. DeCree said.
MGM Resorts, Wynn Resorts and Las Vegas Sands officials said the
companies are working with government officials and taking other
steps to protect staff and guests. Las Vegas Sands reports
fourth-quarter earnings Wednesday. MGM Resorts reports
fourth-quarter earnings Feb. 12. Wynn Resorts' release hasn't been
scheduled.
In Las Vegas, this year's expectations for visitors from Asia,
particularly wealthy high-roller tourists, were already low, said
Barry Jonas, gaming analyst for SunTrust Robinson Humphrey Inc. in
a note Monday.
Increased business from Las Vegas conventions, the city's plans
to host the NFL draft in April and the opening of the Las Vegas
Raiders stadium should offset any weakness, Mr. Jonas said.
The number of confirmed U.S. cases of the new coronavirus has
risen to five, but no cases had been reported in Nevada by
Monday.
Write to Katherine Sayre at katherine.sayre@wsj.com
(END) Dow Jones Newswires
January 28, 2020 17:49 ET (22:49 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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