Brokerage Sanford C. Bernstein Ltd is estimating 2021 casino gross gaming revenue (GGR) in Macau to rebound by 144 percent compared to 2020, which would be about 50 percent of 2019, i.e., the trading year before the Covid-19 pandemic disrupted tourism to the city.
Macau GGR in 2019 was MOP292.46 billion (US$36.6 billion).
The institution stated in a research paper published on Tuesday it had the expectation of “mass performing better” than rolling chip business in 2021. VIP play would in likelihood be at only “one-third of 2019 level”, it said.
Analysts Vitaly Umansky, Kelsey Zhu and Louis Li noted: “We do expect continued shift from junket VIP to premium mass and premium direct that will support further margin expansion, even as total GGR recovery may be slowed by junket VIP weakness.”
The 2021 recovery forecast was “largely dependent” on improvement of travel ties with mainland China – currently the only place to have a largely quarantine-free travel bubble with Macau – and the start of some form of travel bubble with Hong Kong.
Sanford Bernstein expects 2022 Macau GGR to reach circa 89 percent of 2019 levels, with “solid mass reaching over 100 percent of 2019”.
The analysts added: “VIP recovery is a wildcard at this stage”.
The paper examined in particular the fortunes of United States-based casino group Las Vegas Sands Corp and its Asian operating units Sands China Ltd in Macau, and Marina Bay Sands Pte Ltd in Singapore.
The analysts said that Marina Bay Sands would benefit from recovery later this year and into 2022 “as Singapore reopens international travel”.
The long-term prospects of the group in Singapore were strengthened with Las Vegas Sands’ US$3.3-billion expansion project, as agreed with the Singapore government.
“With 60 percent Singapore market share and 50 percent-plus EBITDA [earnings before interest, taxation, depreciation and amortisation] margins, Marina Bay Sands is a cash flow generating powerhouse with growth prospects driven by expansion,” stated Sanford C. Bernstein.
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”We are hoping that within this year, by the end of the year, we will be able to open up the entire [Grand Lisboa Palace] property”
Daisy Ho Chiu Fung
Chairman of Macau casino operator SJM Holdings