What happened
The continued recovery of an important market is a possibility that has excited Melco Resorts & Entertainment (MLCO 1.30%) investors over the past few days -- so much so that, amid the general stock market gloom, Melco shares glowed like a bright neon sign. They rose by 25% across the week, according to data compiled by S&P Global Market Intelligence.
So what
In particular, those Melco shareholders are happy that tourists from mainland China might be returning to Macao in large numbers in the very near future. On Monday, Macao's chief executive Ho lat-Seng said that the enclave -- Asia's gambling mecca -- and Chinese government authorities have agreed to resume the issuance of visas for package tours coming from the mainland.
That caught many Macao casino-watchers off guard, as the general expectation was for such a resumption to occur sometime next year at best. Package tours from the extremely populous mainland were, at least in the pre-pandemic times, a crucial source of revenue for the enclave's foundational casino industry.
The coronavirus has been more of a scourge in China than in other countries and regions of the world. It apparently originated there, and continues to be a problem, despite the country's frequently draconian "Zero Covid" measures to mitigate its spread.
Now what
Melco is one of the casino operators that has gambled most heavily on the Macao market. Nearly all of its large resorts are located there, so it's little wonder that revenue has declined so sharply from pre-pandemic levels, and it has landed consistently in the red of late. Melco badly needs the tourist hordes that once descended on Macao; the sooner they come back, the better.
