Although it may seem tangential to the concerns of a planner, new visa regulations announced in May for Chinese visitors from Guangdong province could have a chilling effect on the explosive growth of U.S.-run casino operations in Macau--more than half of Macau tourist arrivals are from China and industry analysts say the Chinese market accounts for an even larger share of casino income.
Authorities in Guangdong want to limit the number of individual visitor visas by increasing the length of time it takes to issue them, reducing the number of monthly visits from two to one and canceling the issue of business visas.
From now on, individual visas will take 15 working days to be issued, and their holders will only be able to visit Macau or Hong Kong for seven days. Commentators think this is a move to prevent Chinese visitors from working in Macau illegally.
Government officials say this will increase the quality of visitors to Macau, but the head of Wynn Resorts begs to differ.
In a recent announcement about the strong financial performance of the company, Stephen A. Wynn, chairman and CEO, said that he was slowing down the final phases of the Wynn Macau expansion to see what the new visa regulations and a quickly growing number of casinos will do to business.
"While we are very pleased with the positive momentum shown in April and May, we are wary of the future effect of newly restrictive visa requirements imposed by the central government in China which have, in the past few weeks, restricted visitation to Macau from Guangdong province," Wynn said. "In addition, management recognizes and will continue to monitor the effect on our business of the dramatic expansion in supply represented by the openings of the Venetian Cotai in August and the MGM Grand Paradise in November. In light of this uncertainty in the marketplace, we have elected to open only a portion of our Wynn Macau expansion in the third quarter of 2007 and to opportunistically provide the additional supply available in the remainder of the expansion.”
Whether Wynn is the only casino operator to start hedging his bets--and how this will shake out for future development--remains to be seen.
