Hong Kong Not Deterred by Omicron As Travel Restrictions to be Lifted

In a significant step towards opening its borders to mainland China and Macau, the Hong Kong government announced that it will open the new “Hong Kong Health Code” system for registration starting this Friday, December 10.

Hong Kong Recovery Continues

The new system, which aligns with the respective health code tracking systems of the three jurisdictions, is designed to allow travel between Hong Kong and Guangdong Province without the need for quarantine. The absence of a compatible application was seen as a major obstacle to cross-border travel between these three jurisdictions.

It will use a traffic system that allows only people with a “green” health code to cross the border. This is similar to other such systems all around the globe. Although it is expected that travel between Hong Kong and Guangdong Province will resume without quarantine, there will be an initial daily limit.

Inside Asian Gaming reported in June that Macau officials had planned to establish a special “blue code” system for visitors to Hong Kong as part of a plan to reopen the border between the Special Administrative Regions.

Following an outbreak of COVID-19, Macau’s early August, the Macao SAR Government confirmed that 51 hotels had agreed to receive “blue code” guests in approximately 2,700 hotel rooms. However, the plan was scrapped.

Macau Needs Hong Kong

Hong Kong is an important source of traffic for Macau, providing around 22% of its activity. Continued travel restrictions between the two, as well as additional restrictions with the mainland, have hampered Macau’s ability to rebound. With international travel still being thwarted, local travel will become more important.

Many Asian cities have taken a strict approach to close down COVID-19, which may have helped keep case numbers under control and relieved some economic pressure on local economies. It has not helped their international standing as tourist destinations, however.

The top 10 places in an index listing the best destinations around the world are not dominated by Asian cities. Euromonitor International has compiled a list that includes Paris and other European cities. This is due to their relaxed travel policies during the pandemic.

Long-Term Rebound Possible for Macau

According to Jonathan Halkyard, MGM Resorts International’s CFO, due to travel restrictions related to the COVID-19 pandemic in the US, the Macau gaming market “probably be bumpy over the next six or 12 months.” He added,

He added, “I think it’s going to improve, but it’s unknowable at this point how quickly that will improve.” Halkyard’s comments came during an online session at the Morgan Stanley Global Retail and Consumer Conference.

Referring to Macau’s third-quarter earnings season, the CFO stated, “We all saw the revenues that were reported recently, operating at kind of 30 percent of 2019 levels – though sequentially it was a bit better – this is a market that has been impaired by the travel restrictions into it, and that’s going to last for a while.”

Halkyard is optimistic about Macau’s resiliency, despite the recent setbacks. He added, “I don’t think any of that speaks to the long-term opportunity associated with Macau: the demand side for Macau, generally speaking, is going to be fine going forward.”