(Bloomberg) — Shares in Macau casino operators rallied Monday after Chinese authorities introduced new travel permits in an effort to boost the city’s tourism.
Melco International Development Ltd. jumped as much as 14% in Hong Kong trading, the highest since December 2022, while Sands China Ltd. rose 7.1% and Galaxy Entertainment Group Ltd. rose 4.8%. A Bloomberg gauge of six Macau gaming operators gained up to 3.7%.
Starting May 6, mainland Chinese citizens will be able to apply for a permit that allows them to enter the world’s largest gaming center several times a year, the National Immigration Administration announced on Sunday. The permit allows visitors to attend exhibitions, seek medical care or participate in arts and entertainment activities.
The easing of travel measures from China comes as Macau’s post-Covid recovery has lost some momentum as consumers become more cautious about spending amid an uncertain economic outlook. The city’s gaming revenue reached 81% of 2019 levels in December, but fell to 75% in March.
These announcements “indicate that the Chinese government sees Macau as the obvious and relatively preferred destination when it comes to gambling,” JPMorgan Chase & Co. analysts, including DS Kim, said in a note on Sunday. “We will not be surprised if the demand for Chinese toys will be increasingly ‘surrounded’ around Macau.”
The new multiple entry permits are likely to increase tourist arrivals – crucial to the gaming center – after Beijing’s crackdown on high-rollers nearly wiped out the VIP sector that contributed half of the revenue of bets of the territory.
Those joining tour groups covering Macau and its neighboring mainland island Hengqin will also receive a special permit that allows them to travel between the two places multiple times in seven days if they move together in a group, according to the announcement .
“The mainland fully supports Macau’s economy and the travel and leisure industry,” the analysts added. The support is in contrast to China’s growing scrutiny of cross-border or illegal gambling in places such as Singapore, South Korea, Sri Lanka, the Philippines and Cambodia, they said.
Other measures announced on Sunday included faster processing of permits and an extension of business stays to 14 days from seven.
READ: Macau Faces Beijing’s Wrath Over Gambling As Visits Surge Post-Covid
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