Revenue generated by Macao's casino industry plunged 90% year over year in September as the gradual resumption in tourism dampens hopes for a quick recovery.

Macao's gross gaming revenue during the month fell to 2.21 billion patacas from 22.08 billion patacas in September 2019, according to the Gaming Inspection and Coordination Bureau. However, the figure represents a 66% increase from the 1.33 billion patacas generated in August.

Tourist arrivals in August fell 93.7% year over year to 227,113 total visitors, though it was a vast improvement on the 74,006 arrivals recorded in July, based on data from the Statistics and Census Service.

Tourists from mainland China accounted for 88% of visitors, 6% of whom traveled to the region under the individual visit scheme, or IVS, that resumed for the entire country on Sept. 23. This compares to around 49% of total Macao visitors entering the city via IVS in August 2019, which Jefferies analysts in a research note said highlights the importance of the scheme to a recovery.

Meanwhile, 10% of total visitors during the month were from Hong Kong and 1% were from Taiwan.

The average occupancy rate of guest rooms stood at 13.3% in August, down 79.7 percentage points from the year-ago period.

Attention will now turn to China's Golden Week holiday, which began Oct. 1 and has traditionally been a key period for tourism to Macao.

Jefferies analysts expect a return to profitability for casinos during Golden Week but noted that this will depend on the number of tourist visas approved before the eight-day holiday.

Linda Chen, vice chairman and COO of Wynn Macau Ltd., told Bloomberg News in an interview that the Macao gaming industry is projected to log only 30% to 50% of 2019 revenue levels during the national holiday.

"Everyone's expectation is to do a percentage of the past year's [revenue]. No one is expecting to have an immediate rebound," Chen told the news outlet.

According to Jefferies analysts, the sequential improvement in Macao's visitation levels and gaming revenue is expected to continue into the fourth quarter, but it is unlikely to lead to a V-shaped recovery. They anticipate 2021 revenues to be about 70% of 2019 levels.

As of Oct. 2, US$1 was equivalent to 7.98 Macanese patacas.

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