Analysts adjust expectations for 2019
More than 1.2 million people traveled to Macau to kick off the Year of the Boar, and that’s a record. The surge in tourism was good news for the gaming town, which posted a 26.6 percent year-on-year increase in tourism for the Golden Week holiday.
Inside Asian Gaming reported that visitor numbers peaked at 226,874 on Thursday, February 7. Visitation from Mainland China was up 25.6 percent to 899,290. Macau posted a 5 percent decline in GGR in January, IAG reported, its first year-on-year drop since July 2016, but analysts are predicting growth of between 5 percent and 9 percent for February.
Brokerage Sanford C. Bernstein Ltd said in a February 11 note that the boost in tourism did not translate to a comparable increase in gross gaming revenue. Bernstein is estimating that the casino industry will see year-on-year GGR growth of between 2 percent and 5 percent for full February.
“Average daily rate during the period of February 1-10, which encompassed all of Spring Festival Golden Week (February 4–10), was approximately MOP840 million (US$103.9 million),” analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu said. “Month-to-date mass GGR is estimated to be up modestly by low-single digits of percent month on month, whereas VIP volume is up high-single digits of percent month-on-month.”
They pointed out that VIPs stayed away during Golden Week, but added, “We are likely to see some strengthening in high end play during the second half of this month.”
Maria Helena de Senna Fernandes, director of the Macao Government Tourism Office, previously said the city could see an “8 percent to 9 percent” year-on-year increase in visitor arrivals for the 2019 Chinese New Year. Arrivals were helped by the opening of the Hong Kong-Macau-Zhuhai Bridge. Some 200,000 people arrived via the HKZM. But the bridge was surpassed by entries at the Gongbei border gate on the Macau peninsula, which recorded more than 601,000 visitors.
The New Year bump in tourism aside, analysts continue to forecast a slowing in Macau’s gaming industry as a result of a slower mainland economy, the weaker yuan and ongoing trade tensions between the United States and China, reported Reuters.
Earlier this month, China adjusted its economic growth target downward to 6-6.5 percent in 2019. “We remain watching the situation with caution … global growth is uncertain, and where the trade war ends up is also uncertain,” Matthew Maddox, CEO of Wynn Macau, said on a January 30 conference call with investors. “We continue to experience peaks and valleys in Macau.”
Rob Goldstein, president of Las Vegas Sands, which controls Sands China, said the company is confident about Macau’s resilience and its future. “There is always something to worry about. We get that,” he said. “We are just very bullish and we are blinded by the extreme size of Macau, the market today but more important the market tomorrow.”
