Macau’s casinos posted a total of US$3.2 billion in revenue in May, an increase of 1.8 percent over the same month last year.
The result was largely in line with expectations, according to industry analysts Telsey Advisory Group, and benefited year on year from a more favorable calendar, including an extra Friday and a Labor Day holiday that was extended from three to four consecutive days.
Telsey was less than impressed, however, stating in a client report: “The fact that May benefited from this particularly strong setup, but was only able to deliver (low single-digit) growth speaks to a relatively weak trajectory for the industry in the region over the remainder of 2019.
The firm noted that the market is down 1.6 percent year to date through May and said, “We continue to expect (gaming revenue) to be flat at best for the full year 2019 which would be a marked decline from full year 2018 growth of 14 percent.”
The softness belies 2019 visitor numbers that have been strong so far, highlighted through April by a 14.3 percent increase in package tour arrivals, aided by the new Hong Kong-Zhuhai-Macau bridge.
Government figures show cross-border vehicle traffic was up 7.2 percent in April to 434,445 trips: 126,735 through the crossing in Cotai, an increase of 3.6 percent; 277,146 through the main Border Gate; and 27,327 over the new bridge.
Macau International Airport handled more than 6,000 flights during the month, up 21 percent over April 2018, with trips to and from mainland China up more than 36 percent. Year to date through April, total volume inbound and outbound is up 17.7 percent.
Telsey believes weakness in the high-roller segment mostly explains why these factors have not translated into stronger casino revenues. VIP revenue was down 13.4 percent in the first quarter, versus a 16 percent increase in the mass market, the firm noted.
“We believe this has been a function of three factors: 1) the institution of stricter smoking regulations in Macau casinos that went into effect at the start of the year; 2) recent crackdowns on the activities of the shadow banking system in China, which is key for VIP gaming demand; and 3) the recent macroeconomic slowdown in China which has been highlighted by numerous large consumer companies.”
