There was a correlation in the two first months of 2018 between the volume of Chinese visitors to Macau that period and the year-on-year growth in mass-market gaming revenue in the city’s casinos, suggested a Sunday note from Morgan Stanley Asia Ltd.
“The majority of mass [gaming] revenue growth (+16 percent year-on-year) came from Chinese visitation (+15 percent year-on-year), and less from [general consumer] spending growth,” said analysts Praveen Choudhary and Jeremy An, citing data from the Macau government and proprietary research by the financial institution.
Industry analysts and other commentators have previously noted that – given the strength of the VIP and high stakes mass-market segments, the performance of the so-called “grind” market of base mass customers wagering on live table games at the lowest available minimum bets was not necessarily driven by headline numbers of mass tourists to Macau.
Data released on Friday by the city’s Statistics and Census Service said that in February, the aggregate number of tourists to the Special Administrative Region rose by 23.1 percent year-on-year, to 3.07 million. It was the highest monthly tally since August 2014.
The tally of visitors from mainland China – Macau’s largest single source market for tourists – was 2.29 million, rising by 37.3 percent compared to the prior-year period. The aggregate of mainland visitors travelling to Macau under China’s Individual Visit Scheme (IVS) – a category of independent traveller generally viewed as more valuable to the local casino and tourism sector than people in accompanied tour groups – leapt by 57.9 percent year-on-year to 1.40 million. The amount was a new single-month record since the implementation of the scheme in July 2003.
Morgan Stanley noted: “Travel through the Individual Visit Scheme (IVS) and from Guangdong province soared in February thanks to Chinese New Year and [Macau's] proximity [to feeder markets], but overall the trend is that visitation from lower-tier cities still grew at a faster rate (23 percent year-on-year) than that from Tier 1 cities (+8 percent year-on-year) in the first two months of 2018.” That was a reference to a system used by marketing professionals and some other commentators to grade Chinese cities and places by factors including economic development, local gross domestic product, advanced transportation systems and infrastructure, as well as for historical and cultural significance.
Morgan Stanley said that in its analysis, it adjudged Beijing, Shanghai and the whole of Guangdong province to be Tier 1 jurisdictions.
“This analysis assumes that the majority of gaming revenue comes from Chinese,” stated the institution.
“If we were to look at total visitors, mass revenue per total visitors did grow 7 percent year-on-year,” the bank’s analysts added.
Morgan Stanley had said in a January report that growth of the Macau gross gaming revenue was likely to be aided in coming years by lower-tier Chinese cities.
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"Our main focus is just making sure – and particularly within Australia – to the maximum extent possible, that we can have uniformity [among different jurisdictions]"
Chief executive of the Australia-based Gaming Technologies Association