Deutsche Bank Securities Inc estimates Macau’s 2024 casino gross gaming revenue (GGR) will rise by 20.6 percent year-on-year, to the equivalent of just over US$27.62 billion.
The institution thinks most of the improvement will be driven by mass-market GGR, which it forecasts to expand by 23.7 percent year-on-year, to nearly US$21.34 billion. It estimates VIP GGR will be up 11.0 percent from 2023, at just under US$6.29 billion.
Direct comparison between the operational-margin significance of pre-pandemic mass GGR in 2019 and mass GGR currently, is made difficult due to what some industry commentators say is subsequent migration possibly of some former VIP junket players to the so-called premium mass segment.
Due to other market developments, much Macau GGR booked in the pre-pandemic era as VIP, is understood to have been largely generated via junkets, whereas now, more VIP GGR is in likelihood coming from house-managed VIPs, which might yield a margin for the casino operator not directly comparable with junket-managed ones.
Brokerage CLSA Ltd stated in a Tuesday report that for now in 2024, Macau market developments regarding the cost of doing business – including marketing to players via “rebates” – and the scope of sequential expansion of operators’ margin on earnings before interest, taxation, depreciation and amortisation (EBITDA) “will likely remain as key investor focuses”.
But as per Deutsche Bank’s data, its 2024 estimate for mass GGR would represent 108.5 percent of the 2019 level. Its VIP GGR forecast for this year would be only 37.1 percent of 2019 VIP GGR.
Macau’s casino GGR for calendar year 2023 was MOP183.06 billion (US$22.71 billion currently). That figure was up by 333.8 percent year-on-year, coinciding with the lifting in January last year of most travel restrictions between Macau and its main tourism-customer markets of mainland China and Hong Kong.
Macau’s 2023 GGR was 62.6 percent of 2019′s MOP292.46 billion, a trading period immediately before the pandemic.
CLSA said that its Macau research for early 2024 indicated “hotel bookings are fast picking up again”. It stated: “At four weeks out from Chinese New Year weekend – 10 to 11 February – our four-week leading average hotel prices are already 27 percent higher year-on-year.”
The institution added that “10 out of the 33 operating hotels” it tracked were already “fully booked that weekend”.
Macau’s daily casino GGR across the first 14 days of January was estimated at MOP8.6 billion, translating to what JP Morgan Securities (Asia Pacific) Ltd termed a “robust run rate” of MOP614 million per day, versus December’s MOP599 million per day.
“While GGR is due to slow down seasonally for the balance of month ahead of Chinese New Year, we expect January to print MOP17.5 billion to MOP18 billion,” added the brokerage in a Monday memo.
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”Our businesses delivered double-digit growth across the board throughout the year, enabled by strategic investments and strong execution”
President and chief executive of Light & Wonder