Macau Growth Slows in February, but it Doesn’t Appear to MatterPublished March 8, 2018 by Lee R
Last month’s light spending from visitors doesn’t change robust expectations in the world’s largest gaming hub.
Growth slowed in Macau, at a time when revenues were expected to accelerate.
Nonetheless, the holiday period after Chinese New Year’s maintained Macau’s steady comeback with the 19th consecutive month of gains at a 5.7 per cent clip in February.
According to the Macau Gaming Inspection and Coordination Bureau, revenue reached 24.3 billion patacas (S$4.02 billion) for month, the third highest plateau in the largest gambling hub in the world in the past 12 months.
The 5.7 figure did fall short of analyst predictions for revenue growth, which were placed at somewhere between 7 and 12 percent, despite a 6.5 per cent increase in attendance during the National Holiday week.
The overall comeback continues a rebound that really began back in 2014, when slowing economic growth and a widespread crackdown in corruption brought about a five year low.
Strong Private Operators
The trend continues to look robust, as backed up by fourth quarter earning figures from private operators including SJM Holdings and Galaxy Entertainment strengthened.
New IR Opens
Another sign of growth arrived in the form of the February opening of MGM China's US$3.4-billion casino resort just in time for the Chinese New Year.
IR Trend Continues
The IR trend is taking hold as well, with more affluent visitors staying overnight in recent months that has transformed the resort into a high end destination with diversified offerings supplementing casino venues, including leisure favourites such as entertainment, dining options and leisure facilities, for a total visitor increase in 2017 of almost 10 percent.
Huge Revenues Soon
More analyst predictions for Macau include Praveen Choudhary of Morgan Stanley projecting gross gaming revenue of US$60 billion by 2022.
Drivers of Future Growth
The boosts are based on future increased patronage from so-called lower tier cities in China, higher visitor spending, high-speed train extensions and a bridge connecting Hong Kong, Macau and neighbouring Zhuhai.
Expanding Gambling in China?
At present, Macau remains the only place in China where gambling is legal. The $33 billion it took in last year is almost three times the state of Nevada’s. Now the word is Chinese officials are considering casino permissions for the island of Hainan.
Macau’s Overall Impact
Macau’s growth makes expansion will look increasingly viable and attractive.