The recovery in Macau’s casino sector gained traction in April, with gaming revenue climbing 449.9% to hit a three-year high as Chinese tourists continue to flock to the gambling hub.
(Bloomberg) — The recovery in Macau’s casino sector gained traction in April, with gaming revenue climbing 449.9% to hit a three-year high as Chinese tourists continue to flock to the gambling hub.
Gross gaming revenue reached 14.7 billion patacas ($1.8 billion), according to data released by the Gaming Inspection and Coordination Bureau on Monday. The result was better than the median analyst estimate of a 393% year-on-year increase, and is the highest monthly taking since January 2020. It was still more than a third below the 2019 level.
Key Insights
- China’s five-day Labor Day holiday that runs through May 3 will be a key test of the strength of the tourism boom. Macau expects at least 70,000 visitors a day on average in the period, and had already seen numbers exceed 60,000 a day in late April, GGRAsia reported, citing Maria Helena de Senna Fernandes, head of the city’s tourism office. That would be about 64% of the average daily visitation in May 2019. The government will release April data later this month.
- Casinos are also facing a labor shortage that’s seen some resorts close hotel rooms and cut services, resulting in a surge in room rates and deterring some travelers from visiting.
- Hotel room prices are higher than they were in 2019, even though the overall booking rate is slightly below pre-pandemic levels, according to Morningstar Inc. analyst Jennifer Song. Sands China Ltd. Chief Operating Officer Grant Chum said in April that the group only opened about 7,700 rooms in the first quarter, which means it had shut 38% of its hotel units in the period, and expects to operate near full capacity by the summer holiday season.
- While the casinos’ recovery has been boosted by a domestic tourism revival, growth could flatten in the second half of the year when China adds more international flights and pent-up travel demand normalizes, according Credit Suisse analysts including Kenneth Fong.
- Analysts surveyed by Bloomberg estimate Macau’s gaming revenue this year may return to 56% of the pre-pandemic level. But a full recovery is likely to take years as the sector grapples with longer-term risks, including China’s crackdown on high-rolling gamblers. Gross gaming revenue next year is expected to recover to 71% of the 2019 level, according to the survey.
Market Performance
- A Bloomberg Intelligence index of Macau casino operators rose 5.6% in April, while the benchmark Hang Seng Index fell 2.5% in the same month.
Read More
- Former Macau Junket Boss Chan Sentenced to 14 Years: TDM
- Las Vegas Sands Leads Peers Higher on Signs of Macau Rebound
- Macau Casinos’ Quarterly Profit Set to Hit Highest Since 2019
- Macau 1Q VIP Gaming Revenue Rises to Highest Since 1Q 2021
- Macau Casinos Shut Thousands of Hotel Rooms in Labor Crunch
- Macau Gaming Revenue Jumps to Three-Year High on Tourism Boom
–With assistance from Karen Leigh.
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