GGRAsia – Macau govt, analysts tip May Day bounty at casino resorts

Macau govt, analysts tip May Day bounty at casino resorts

Apr 20, 2021 Newsdesk Latest News, Macau, Top of the deck

The average nightly occupancy rate for Macau hotels – including properties in casino resorts – could reach “70 percent to 80 percent” during the upcoming Labour Day break in May, indicated a Macao Government Tourism Office (MGTO) senior official on Tuesday, citing the latest hotel room booking data from the industry.

The holiday season encompassing Labour Day on May 1 was likely to “emerge as the best” for the Macau tourism “since the pandemic” started, early last year, said MGTO deputy director Cheng Wai Tong, in comments to the local media on the sidelines of a Tuesday event.

The latest forecast on average nightly occupancy for the Labour Day break is higher than that previously mentioned by a fellow MGTO official on Friday. That person said hotels might be “40 percent to 50 percent” full during the holiday period.

China’s State Council has designated the first five days of May as the Labour Day break for this year.

Currently, only mainland China has a usually quarantine-free travel bubble with Macau, although Macau ID holders are being offered from April 15 until December 31 inclusive, public subsidies toward the cost of a so-called staycation in local hotels.

MGTO’s Mr Cheng said the tourism authority expected the city to see the average daily volume of visitors “exceeding” the tally reached on April 16. That day, more than 34,000 visitor trips were made to Macau: the highest daily count since the start of the pandemic last year.

In a Monday research memo, Morgan Stanley Asia Ltd indicated there would be a spike in flight capacity from mainland China to Macau for the upcoming Labour Day break – in particular from the city of Shanghai.

This suggested “strong… demand” for travel from the mainland, during the holiday period. The analysts believed that there was a “strong positive correlation” between the flight capacity from China to Macau and the market capitalisation of the Macau gaming names.

The operator of Macau’s airport expects a circa 26-percent-higher volume of passenger movements in April compared to March, according to information it provided to GGRAsia.

The current tally of air services linking Macau to Shanghai for April 29 to May 5 was already 61 percent of the equivalent period in 2019, said Morgan Stanley.

This compared to year-to-date levels that were only 37 percent of 2019 demand, said Morgan Stanley analysts Praveen Choudhary, Gareth Leung, Wei Fang, and Qianlei Fan in the Monday memo.

The Morgan Stanley team also noted that the current tally of flights to and from China registered for the Labour Day holidays was already 52 percent of 2019 levels.

Separately, JP Morgan Securities (Asia Pacific) Ltd said it expected a “step change” in gross gaming revenue (GGR) for the upcoming break.

“We think a GGR print of anywhere from MOP400 million [US$50 million] to MOP500 million a day would be seen as a strong success for the May Day holidays… versus a MOP1.0-billion to MOP1.1-billion a day run-rate for the 2019 Golden Weeks (i.e., Chinese New Year, May Day, and National Day),” wrote JP Morgan analysts DS Kim, Derek Choi and Livy Lyu in a Monday note.

If that happened, Macau’s mass gaming demand could recover to “70 percent to 80 percent” of 2019 average levels, the JP Morgan analysts added.