Gloomy Fiscal Forecast for 2022 by SJM
SJM Holdings Limited, one of Macau’s largest casino and hotel operators, recently released its forecast, suggesting a more significant loss for fiscal 2022. While the company is optimistic that revenue will return to pre-pandemic levels in the current fiscal year, it has already reported losses of over $1.3 billion due to the impact of travel restrictions during the COVID-19 pandemic.
Details of SJM Holding’s Losses
Earlier this month, SJM Holdings reported an impairment charge for their Jai Alai Tourism Complex refurbishment project, resulting in a total loss of $1.3 billion (USD).
The $1.3 billion loss was attributed primarily to reduced demand from mainland tourists as international travel restrictions remain imposed due to the pandemic. The impact on Macau casinos and its tourism industry has been significant and is expected to continue into fiscal 2022.
January 2021 Gambling Revenues in Macau
In January 2021, Macau gambling revenues surged 82% year-on-year due to relaxed travel requirements between mainland China and Hong Kong SAR. The surge marked the first time since February 2020 that tourist arrivals surpassed 100,000 visitors, compared to only 4 million visitors during the Lunar New Year 2019 before the outbreak of COVID-19.
Although passenger numbers are still lower than pre-pandemic levels, it shows signs of recovery, with January’s figures being almost double those seen in December 2020 (46%).
The effects of the COVID-19 pandemic are still felt in many aspects of life. The gambling industry has also not been spared, with January 2021’s revenues being much lower than that of the Lunar New Year period in 2019.
This is even though January 2021’s numbers are considered strong. Unfortunately, they are less than half of what SJM saw two years ago, pre-COVID-19 outbreak, showing how much of an impact this pandemic has had on society, not just the gambling industries.
Conclusion:
Overall, while there are some positive developments in Macau gambling revenues due to eased travel restrictions between mainland China and Hong Kong SAR, it is unlikely that casinos will reach pre-pandemic levels anytime soon.
Despite this gloomy outlook, SJM Holdings remains optimistic about its financial outlook for fiscal 2022 as long as international travel restrictions remain loosened or lifted altogether. For now, only time will tell how quickly Macau’s gambling industry can recover after such a long period of disruption and uncertainty caused by COVID-19. Gamblers can take solace in knowing that despite all odds, there may still be hope.
