Macau casinos see post-CNY upturn
Macau Casinos Showcase Stronger-Than-Expected Revenue Following Soft Chinese New Year
The Lunar New Year stands as the most critical celebration in the Chinese calendar, serving as a prime opportunity for travel, particularly to Macau, the only locale in China where gambling is legally permitted.
This year, although the week-long festival initially underperformed in terms of revenue generation, a noteworthy recovery followed the New Year celebrations, marking the commencement of the Year of the Snake.
On February 10, analysts from Jefferies Group reported that the initial weakness experienced during the holiday period is projected to transition into “neutral to modestly positive” financial outcomes as the quarter progresses.
“The trend post-CNY proved to be somewhat stronger than the actual performance observed during the holiday,” the Jefferies team highlighted in their analysis, noting a daily revenue of MOP 822 million (approximately $102 million) through February 9.
Furthermore, they stated, “Post-CNY (February 6-9) Average Daily Revenue (ADR) was MOP 725 million/day, outperforming the MOP 544 million/day recorded in the 2024 post-CNY week (February 19-29). This improvement reflects the ongoing presence of high rollers beyond the holiday itself.” It is worth noting that mass and VIP Gross Gaming Revenue (GGR) surged month-on-month by 35%-40% and 42%-47%, respectively.
2024: Increased Visitation Amidst Decline in GGR
During the previous year, record-setting visitation ignited the Year of the Dragon, surpassing pre-pandemic figures from 2019 by 3.7%, as reported by the Macao Government Tourism Office (MGTO).
Despite this influx of visitors, Gross Gaming Revenue (GGR) for the same period was recorded at MOP 18.46 billion (approximately $2.29 billion), slightly falling short of market expectations, which hovered between MOP 19-20 billion, according to analysts at JP Morgan. A Bloomberg report attributed these outcomes to a “cautious spending outlook among tourists.”
Nevertheless, a resurgence was observed in March 2024, with GGR rising by 5.5% month-on-month to exceed MOP 19.50 billion, indicating a potential rebound in gaming activity.
Analysts Predict Continued Recovery
Looking ahead, Jefferies forecasts that the recovery trend will persist, projecting a GGR range of MOP 18.4 billion to MOP 19.4 billion for February, slightly down from the MOP 18.5 billion reported in February 2024, which was impacted by the leap year.
In support of this outlook, JP Morgan analysts DS Kim, Mufan Shi, and Selina Li noted that the “post-Lunar New Year GGR exceeded conservative expectations at MOP 725 million/day, propelled by robust ‘tail-end’ demand, which partly compensated for the challenges faced during the Lunar New Year.”
The JP Morgan team anticipates monthly GGR will settle between MOP 18.3 billion and MOP 19.4 billion for the upcoming reporting period.
Additionally, the Macau government has projected an ambitious full-year GGR target of MOP 240 billion, reflecting an 11% year-on-year growth, thereby reinforcing the optimistic narrative surrounding the recovery of Macau’s gambling landscape in 2024.
