Since the beginning of this month, more than 100 new cases were reported in Guangdong, with most appearing in Foshan and Guangzhou. In response, Macau authorities are requiring that anyone entering from the province provide a negative test that’s no more than two days old. The previous requirement was a seven-day old test.

Furthermore, travelers that have been to Foshan and Guangzhou over the past two weeks that are looking to enter the gaming hub must quarantine at a Macau hotel for 14 days. Tighter protocols could weigh on SAR’s recovery.

“Tighter immigration policy from Guangdong will undoubtedly weigh on demand, putting a break in the respectable sequential recovery over the past six months,” said Credit Suisse analysts DS Kim, Derek Choi, and Livy Lyu in a recent note.

In the Macau recovery scenario, there’s no understating the importance of Guangdong, because its proximity to the casino hub has a material impact. The province accounts for about 45% of the annual visits to Macau.

Dating back to the months immediately following the onset of the coronavirus, analysts widely viewed Macau as the most rapidly return to pre-pandemic level.

That hasn’t been the case, and executives from some of the SAR’s concessionaires are expressing disappointment at the sluggish pace of recovery. However, they add that they’re supportive of Macau’s safety first strategy, and that they’re still bullish on the long term outlook for demand.

Still, with Guangdong and Hong Kong grappling with increased case counts, Macau’s near term outlook is shadowy.

“It also goes without saying that the long-awaited Guangdong-Hong Kong-Macau travel bubble is unlikely to happen in the very near-term, at least not until Guangdong and Hong Kong report zero local cases for over two weeks,” said the Credit Suisse analysts.

Editing by Rachel Hu