Macau Reports a GGR Drop of Almost Four Fifths to Put the Exclamation Point on Forgettable 2020
Published January 10, 2021 by Lee R
Hoped for signs of recovery are rooted in containment efforts for beleaguered Macau.
Well, the numbers are in for Macau's ominously forgettable 2020.
The Drop
Macau's GGR plummeted 79.3% year-on-year for 2020.
The Restrictions
The Chinese Special Administrative Region was unable to recover from pandemic-induced closures and travel restrictions that dominated the landscape from March forward.
Total GGR
Total GGR for the 12 months of 2020 was MOP60.44bn (£5.55bn/€6.15bn/$7.57bn); down from 2019's MOP292.46bn.
Factors
The pandemic caused the perfect storm of market factors: the temporary closure of casinos for the early phase of the pandemic and travel restrictions which limited the amount of people who could patronise Macau's casinos.
Signs of Life?
The easing of measures later in the year resulted in some signs of improvement in 2020's closing months.
December GGR of MOP7.82bn was down 65.8% off December 2019, but was still the second highest monthly total of 2020.
Operator Losses
Local operators in the area experienced the pinch, with leading operator MGM Resorts International publishing a 93.6% revenue drop on its Macau holdings down to $46.9m.
Asia's casino operating giant Galaxy Entertainment saw GGR for Macau holdings decline 93.9% year-on-year for Q3, while Melco revenue dropped 85.2% for a $386.9m loss.
Wynn Palace Macau further reported a 97.4% drop in revenue for Q3, with Wynn Macau property revenue falling 89.2%.
Recovery Prospects
In a region that relies on gambling like no other, the Economist estimates Macau to have the highest economic recovery for any region in the world next year, at 35 per cent, with a major caveat provided by the Macau government itself.
Macau Local Projections
In its 2021 Policy Address, the SARS Authority projects that if the pandemic remains under control in Macau and neighboring regions remains and containment is improved, GDP could reach double-digit annual growth in 2021.
This recovery is projected within an economy that is going to be significantly smaller, having contracted in 2020 to 61.9%.
Outlook
Macau will be looking to restore growth, followed by a re-expansion of the economy later in the year. Potential drivers of growth such as opening of casinos and subsequent IR projects; more iGaming; cross border traffic and the eventual re-introduction of VIP junkets are all variables dependent on the logistics of the pandemic for 2021.
