Crown arrests a concern
Gaming revenues in Macau’s gaming industry rose 1.1 percent in August to $2.4 billion following the opening of Wynn Resorts’ luxurious Wynn Palace on the Cotai Strip. It was the gaming jurisdiction’s first month in the black in 26 months, and was followed by a healthy 7.4 percent boost in September, to $2.3 billion, buoyed by the opening of Sands China’s $ billion Parisian resort on Cotai.
According to a report on Investors.com, the signs are hopeful, but analysts remain cautious. A September report from JPMorgan said most of the gains originated with VIP traffic and the hoped-for mass-market rebound was yet to come.
“We’d like to get more positive on the Macau names,” wrote analyst Joseph Greff, “but do not see a turn in fundamentals, and the valuations here do not look appealing.”
Following the Chinese Golden Week holiday in the beginning of October, Goldman Sachs said Macau tourism was up 8 percent in September and broke records during the holiday of more than 190,000 visitors a day. Hotel occupancy for the month hit 92 percent of capacity even though new resorts added 6,000 rooms to the city. Occupancy at five-star hotels increased 5.5 percent to more than 94 percent of capacity.
However, the website also questioned if this is a true rebound or a bump linked to the new openings. The arrests of 18 Crown Resorts employees in China also threw a scare into operators and investors, and gaming consultant Ben Lee of aid Ben Lee, managing partner at Asian gaming consultancy IGamiX told Bloomberg News, “We expect the direct VIP and premium mass market will dive over the next several months.”
