Macau pulls out of CNY slump
Lunar New Year is the most important holiday in the Chinese calendar and prime time for travel to Macau.
The week-long festival typically bodes well for city casinos, as punters travel en masse to the only place in China where gambling is legal.
This year, results for the week-long national holiday were below expectations. But a revenue bump followed CNY, the official start of the Year of the Snake.
In a 10 February note, Jefferies Group analysts said holiday weakness should give way to “neutral to modestly positive” returns as the quarter progresses.
“The trend post-CNY was slightly better than the actual CNY performance,” the Jefferies team wrote, with daily revenue of MOP822M through 9 February.
“Post-CNY (6-9 February) ADR was MOP725M/day,” they wrote. “This is higher than 2024 post-CNY week’s MOP544M/day (19-29 February), as high rollers appeared to stay beyond the holiday period.” Mass and VIP GGR were up month-on-month by 35%-40% and 42%-47% respectively, they added.
In 2024, visitation up, GGR down
Last year, record visitation kicked off the Year of the Dragon, exceeding 2019 figures by 3.7%, according to the Macao Government Tourism Office (MGTO).
But gross gaming revenue (GGR) for the period was MOP18.46 billion (£806 billion/€966.2 billion/$2.29 billion), “a tad lighter” than the consensus of MOP19-20 billion, said JP Morgan analysts. A Bloomberg report attributed the 2024 results to a “cautious spending outlook among tourists”.
However, March 2024 saw the start of an uptick. GGR rose 5.5% month-on-month to slightly more than MOP19.50 billion.
Analysts: Recovery should continue
Likewise this year, Jefferies expects “the recovery to continue going forward”, with projected GGR of MOP18.4 billion to MOP19.4 billion for the month, versus MOP18.5 billion in February 2024, during a leap year.
According to Macau Business, JP Morgan analysts DS Kim, Mufan Shi and Selina Li observed “post-LNY GGR (that was) be better-than-feared at MOP725 million/day thanks to solid ‘tail-end’ demand, somewhat offsetting the weakness from LNY.”
The JP Morgan analysts project monthly GGR of MOP18.3 billion to MOP19.4 billion.
Meanwhile, the Macau government has forecast full-year GGR of MOP240 billion, up 11% year-on-year.