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Few Macau travel restrictions seen in near future

23 April 2012

by Howard Stutz

MACAO -- Airline service between Macau and Vietnam and additional ferry routes connecting the gaming enclave and Hong Kong might be a signal the special administrative region's government isn't planning on instituting travel restrictions anytime soon, a gaming analyst said Friday.

That's welcome news for Las Vegas-based gaming companies.

In the past, the Chinese government has restricted visas issued for travel from mainland China and other markets into Macau, the only location in China where gaming is legal.

Last year, Macau's 34 casinos took in $33.5 billion from gamblers, more than five times what was collected on the Strip. For the first three months of 2012, Macau casinos have averaged $3 billion in gaming revenues, a more than 20 percent increase compared with the same three months of 2011.

Union Gaming Group Principal Bill Lerner told the firm's clients the news of increased entry options into Macau was good news for American-based gaming companies operating in Macau, especially Las Vegas Sands Corp., which opened the first phase of its $4.4 billion Sands Cotai Central complex on April 11, adding the 35th casino to Macau's mix.

Earlier this week, the Macau Maritime Administration approved three new ferry routes that connect a terminal with the Hong Kong and two ferry terminals in mainland China. Much of Macau's domestic visitation comes from high-speed ferry service across the South China Sea.

The new routes are expected to be available in six months.

Lerner said the new routes could result in as many as 7,000 additional sailings per year and 1 million additional visitors. Last year, Macau attracted roughly 28 million visitors.

"The additional ferry sailings would be a positive for all Macau concessionaires, although with a greater benefit for Cotai operators, especially Sands China with the most Cotai exposure," Lerner wrote in a research note.

The Cotai ferry terminal is also being expanded from three berths to 19, with completion in mid-2013. Construction could increase the terminal's annual capacity to 15 million passengers.

Also, beginning next week, Vietnam Airlines will begin twice-weekly service between Da Nang, on the central coast of Vietnam, and Macau. The flights represent the only direct service between the two countries.

Lerner thought the flights were primarily aimed at inbound tourism to Vietnam.

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