Gross gaming revenue (GGR) in Macau for the first week of March was “disappointing” and “somewhat worse than expected”, respectively say two brokerages. The comments are based on their separate analysis of unofficial industry returns.
“Our channel checks indicate that Macau’s GGR… for last week (March 1-6) was around MOP3.2 billion [US$400 million], implying an ADR (average daily rate) of MOP533 million, around 21 percent lower than February’s ADR of MOP673 million,” analysts Vitaly Umansky and Simon Zhang of Sanford C. Bernstein Ltd said in a Monday note.
They added: “The estimate for the first week of March is disappointing as we were projecting March to decline around 10 percent year-on-year.”
Sanford Bernstein said it now estimated GGR for full March to decrease between 18 percent and 24 percent compared to the prior-year period.
GGR in March 2015 was MOP21.5 billion. It was the highest GGR monthly tally recorded in Macau over the past 12 months.
Analysts David Katz and Brian Davis of Telsey Advisory Group LLC said month-to-date GGR in Macau was “somewhat worse than expected… so far.”
They added: “While one week does not a month make, we note that the results… indicate that the flattish February results were driven by easy comparisons rather than meaningful improvement in market fundamentals.”
GGR in Macau for February declined by 0.1 percent in year-on-year terms, according to data disclosed by the city’s casino regulator.
Telsey now expects GGR for full March to go down by 24 percent compared to the prior-year period.
Daiwa Securities Group Inc said in a Monday note that the softening was largely in-line with its expectations, given that March is “seasonally a weaker month”.
Daiwa analysts Jamie Soo, Adrian Chan and Jennifer Wu added: “Operators have responded to prevailing market conditions by pushing out very attractive promotions on hotel rooms and other non-gaming activities for the month of March.”
Macau’s six casino operators recently came together to launch a major promotion campaign for its non-gaming offerings, targeting Macau ID holders. The campaign runs until March 31 and features discounts of about 20 percent for hotel rooms, shows and entertainment, spas, restaurants and other non-gaming elements.
Daiwa said in its Monday note that it continued to expect Macau to see a 13 percent year-on-year decline in GGR for full March.
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Alex Poon and Praveen Choudhary
Analysts at Morgan Stanley