Monthly growth up 12 percent
A less-than-stellar Golden Week holiday should not significantly constrain GGR growth in Macau for the month of October.
According to Japanese brokerage Nomura, “despite a slower than expected start” to the holiday celebration, which lasted eight days this year, gross gaming revenues are estimated to grow “approximately 13 percent sequentially from September, which would translate into daily GGR of circa MOP800 million (US$99.5 million) for the month, implying year-on-year growth of approximately 12 percent.”
Nomura added that daily GGR “will be circa MOP800 million to MOP810 million, or +14 percent to +15 percent year-on-year.”
Visitor arrivals to Macau during the holiday were up 10.3 percent from the same period in 2016, according to GGRAsia. The publication cited several institutions and “unofficial sources” who said mass-market GGR growth was slow in Golden Week and VIP was boosted by higher-than-average hold.
Morgan Stanley said in a note that challenges await in the fourth quarter due to the recent slowdown in VIP play, a high base of comparison year-on-year, a “macro/liquidity slowdown” in Mainland China, and a potential premium mass slowdown as China cracks down on ATM use for cash withdrawals.
In other Macau news, brands including Wynn and Melco are well positioned for long-term success in China’s growing premium market, says brokerage Sanford Bernstein.
In a report titled, “China Consumer: Premium is the new mainstream,” Bernstein says the consumer class in China of about 63 million people will grow larger still, up to 7.4 percent CAGR through 2026.
“The long-term winners in premium will be the companies who own and nurture intrinsically differentiated brands, in our view,” Bernstein said. “Wynn and Melco have strong, intrinsically differentiated brands and hence are well positioned to sustain their existing competitive advantages over time.”
Macau Business reports that Pansy Ho, vice chairman of the city’s Global Tourism Economy Forum, says Macau must continually create new experiences for those tourists, otherwise “people will come once and go elsewhere the next time.”
“We need to reinvent ourselves,” said Ho. “Every time tourists come back, we want to create the conditions so they will think that Macau is the place that always has the next new experiences.” She added that it’s “impossible for the city to experience any extreme growth. We should pursue a more stable and gradual growth in the numbers.”
Ho said the city should court young middle-class families as visitors. “They are more affluent, more educated, and these people would like to obviously explore. They would have demand for leisure and entertainment. It would be enough to have them re-visit Macau and become our stable customer source.”
Jay Chun, chairman of Macau gaming operator Paradise Entertainment Group, told Inside Asian Gaming the city must also embrace new technologies to become a leading tourism and entertainment destination.
“Moving forward, I think we will need to refine our offerings and provide something that’s not just more, but something that’s better—more high-tech, more customer friendly and more suitable for tech-savvy young people,” he said. “My vision is for Macau to continue leveraging its advantages of being central to the Asian gaming world, being the largest gaming market and being the primary link between China and Portuguese-speaking countries. I want us to become the world’s model of a ‘smart city.’
“Because of Macau’s size and the structure of our economy, we have an excellent opportunity to do this.”
The Hong Kong-listed company is currently seeking to take over satellite properties in the market to be licensed by one of the city’s Big 6 concessionaires. “We’ll still look into acquisition when there are any suitable opportunities,” Chun told GGRAsia. “Currently we have not yet had any definite target.”
