Macau mass-market casino gross gaming revenue (GGR) for the recent Chinese New Year (CNY) holidays could have recovered to at least 60 percent of that for the 2019 break, when the festivities were in early February, according to a Monday note from brokerage JP Morgan Securities (Asia Pacific) Ltd.
The institution said that in likelihood, the pace of mass-market GGR recovery had significantly outrun the recovery rate in visitor volume, which at 451,000 for the seven days of the mainland’s Chinese New Year break had been about 37 percent of the tally for the 2019 holiday.
“While we admit it’s tough to estimate weekly revenues, our sense is that lunar new year mass gaming revenues may have recovered to 60 percent to 70 percent of 2019 lunar new year’s, which would be nearly double what visitation figures indicated and double what we have in our models,” wrote analyst DS Kim.
In 2019, when junket-based VIP business was still an important part of the Macau market, February GGR as a whole, was MOP25.37 billion (US$3.14 billion), according to data from Macau’s Gaming Inspection and Coordination Bureau. In the first quarter of 2019, VIP baccarat – in likelihood mostly generated by junket-coordinated play – had been 48.9 percent of the market.
Mr Kim observed in his Monday memo, that “2019 lunar new year generated one of the – if not the – best mass gaming revenues in the history of Macau, so 60 percent to 70 percent recovery against this figure… would be very telling and well above what the Street [investment sector] is expecting.”
Mr Kim stated in his latest memo: “All the [Macau] operators that we’ve met were positively surprised by the level of demand during lunar new year, across all segments… including in-house VIPs.”
The JP Morgan analyst suggested that visitor volume was “not the right figure to look at if one wants to project gaming revenues”. This was due to factors including uplift in the economic “quality” of visitors, as the package tour trade was yet to ramp up.
Las Vegas Sands Corp, the parent of Macau casino operator Sands China Ltd, flagged last week “pent-up demand” in the Macau market during the Chinese New Year break. Rob Goldstein, the group’s chairman and chief executive, said the firm was in “very positive territory” and seeing “strong” momentum in its Macau operations, following the relaxation of travel restrictions related to the Covid-19 pandemic.
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