The average Chinese customer at a Macau casino is aged 36, is more likely than not to be male, very likely lives in one of China’s most economically developed cities – known to marketing professionals as Tier 1 or Tier 2 centres – earns CNY19,000 (US$2,900) per month, and has visited Macau three times in the past 12 months.
That is according to a proprietary survey by brokerage Sanford C. Bernstein and Co LLC, called “2017 Bernstein China premium consumer usage and attitudes survey” and published on Wednesday.
“Five Bernstein analysts have undertaken a bespoke consumer survey of Chinese premium consumers to dig into the characteristics of premium demand and the key drivers of choice when consumers trade up,” stated the document. It did not mention the size of the sample or the methods used to collect the information.
The paper noted: “All Macau gaming spend can be called ‘premium’ (not to be confused with commonly termed ‘premium mass’).” The latter is a term used by casino managements to indicate players that bet in high denominations but in cash, rather than via the credit issued to VIP players for the junkets’ and casinos’ rolling chip programmes.
The Bernstein survey suggests its average Chinese player in Macau has a gaming budget “of at least CNY20,000” per trip.
The survey suggested 61 percent of Macau’s Chinese players are male and that the most important motivator when choosing a property in Macau is what the brokerage termed “functionality”.
A Tuesday memo from the brokerage suggested the number of “premium” mainland Chinese consumers – which it characterised as those earning more than CNY25,000 per month – would expand by a compound annual growth rate (CAGR) of 28 percent in the next five years.
Regarding what appeals to the brokerage’s “average” Chinese player in Macau, Sanford Bernstein suggested the casino environment, the quality of the hotel rooms, and the property’s non-gaming offerings were key elements.
“Due to its large hotel room presence and critical mass, properties owned by Sands [China Ltd] are, unsurprisingly, the most frequented, while Melco [Resorts and Entertainment Ltd] and Wynn [Macau Ltd] have the highest percentage of higher-income customers, while SJM [Holdings Ltd] customers are getting older,” suggested the report.
It added: “Macau is the largest premium gaming market in the world, with over US$15 billion in VIP GGR [gross gaming revenue], US$8 billion in ‘premium mass’ GGR, and US$9 billion in ‘base mass’ (where even a base mass player with US$450 to US$550 of average losses per visit can be considered a premium consumer).”
The brokerage suggested Macau casinos’ penetration of the mainland China consumer market was still at low levels: it estimated approximately 5 percent of an “addressable market” based on what it termed “reasonable” income levels.
“Premium customers remain critical for long-term Macau growth, as wealthier customers spend more and visit more frequently: and the population of this demographic is increasing. Over the next 10 years, Macau is estimated to have 6.4 percent CAGR [compound annual growth rate] in GGR, with VIP CAGR of 4.8 percent and mass CAGR of nearly 8 percent. The key driver of mass will be premiumisation [sic] (overnight visitors, staying longer and spending more),” said the authors.
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”The Macau government is not aiming to trivialise or drive out the junket sector, but to regulate the sector so that it would not hurt Macau’s reputation”
Alvin Chau Cheok Wa
Chief executive of privately-held VIP junket business Suncity Group