What happened
What happens in the Chinese gambling enclave of Macau really matters to casino resort-operator MGM Resorts International (MGM 2.02%). So it was good news for the company Tuesday when that nation's government announced a relaxation on quarantine restrictions for incoming travelers. Unsurprisingly, MGM's stock did better than the S&P 500 index on the day, declining only marginally, while the index sagged by 2%.
So what
On Tuesday, the Chinese government released a new protocol reducing mandatory quarantine times for visitors to its country. These travelers will now only be required to be quarantined in a designated facility for one week before monitoring their health independently for another three days. The previous requirement was 14 days of quarantine, which in turn was reduced from the preceding 21.
It's clear that MGM Resorts investors were cautiously optimistic about this news because it doesn't mean Macau is going to make a sudden and full recovery. Visitor traffic to the enclave is still down significantly, and business there is hurting badly. In itself, the new protocol isn't a game changer for the beleaguered casino resort operators, like MGM and its peers, which own massive properties there.
Now what
That being said, the government's 50% reduction of quarantine time is an encouraging sign that China might be moving past its latest serious phase of the pandemic, if slowly. Macau will almost certainly return to the heavy traffic levels it previously enjoyed. The only catch is that investors will have to find the patience to endure the rather pronounced dip in business in the interim.
