Investment bank UBS forecasts that gaming revenue in Asia’s premier casino markets will rise on average by 11 percent a year over the next five years, reaching US billion by 2018.
If this holds true it will represent a 66 percent increase over 2013, with the fastest growth to come from Macau and the Philippines, driven by new integrated resort development, a new report by the bank says.
The report stresses that market penetration and GDP trends indicate that cannibalization will not be an issue, nor will the anticipated growth pose a threat to Macau’s position as world revenue leader. Rather, the bank points out that with penetration rates remaining relatively low, operators will focus on customers within a three-hour’s flight of their markets.
“There appears to be little overlap in core addressable markets (with the exception of Singapore and Malaysia) and therefore little competition between the gaming centers, as future supply remains focused on penetrating existing addressable markets,” the report says.
Macau’s current penetration of the mainland Chinese population is only about 2.7 percent, the report notes, adding that regional competition will not be an issue for the city because “Macau’s superior offering in both gaming and non-gaming amenities should shield it from material impact.”
The report projects the number of hotel rooms across the region will increase by 56 percent through 2018. Gaming tables will grow by 49 percent and machine games by 56 percent.
