Analysts differ on October forecasts
Investors and analysts are hoping for a successful Golden Week holiday in Macau. In early reports, for the first two days of October Chinese arrivals to the territory were up 27 percent year-on-year—the best two-day start to Golden Week in at least six years, according to the Macau Government Tourist Office.
Investors have been concerned that Macau’s leading industry could be negatively affected by the slowing Chinese economy, a weakening yuan and trade tensions between China and the United States. Those factors have contributed to slower revenue growth since the second quarter and less than great expectations for Golden Week.
Bloomberg Intelligence analyst Margaret Huang sees the bright side. “Positive drivers for Macau’s Golden Week include the fact that Macau and Hong Kong still have the greatest appeal given better connectivity, ease of access and milder weather conditions,” she said, and predicted that Macau’s gaming revenue for the full month of October could exceed 28 billion patacas (US$3.5 billion) for the first time since 2014.
At the same time, an October 1 note from brokerage Sanford C. Bernstein said Golden Week “is shaping up to be weaker than initially expected.” Analysts Vitaly Umansky, Zhen Gong and Kelsey Zhu wrote that hotel bookings “looked strong going in,” but “recent checks of online travel agencies, group travel and property websites imply remaining room availability.”
GGRAsia reported that 17 of 27 of Macau’s biggest casino resorts were completely or almost completely booked for the period of October 1 to October 6 as of September 31. But the Bernstein team added, “Last year, there was a similar development with initially strong bookings that did not result in outsized gross gaming revenue.”
JP Morgan Securities analysts DS Kim and Sean Zhuang wrote, “All eyes will be on demand trends during Golden Week, such as junket feedback and industry consultants’ weekly GGR estimates.” The duo forecast October GGR to expand by between 3 percent and 5 percent.
September GGR rose by 2.8 percent year-on-year to MOP21.95 billion (US$2.72 billion), according to official data released on October 1.
