Investment bank UBS AG expects Macau’s casino-resort market to perform even better during the five-day mainland China holiday straddling the end of April and the beginning of May, than it has done so far in April.
“We continue to expect stronger business trends in May Golden Week, on the back of the return of group tours as well as the increase in transport and hotel capacity,” stated a memo from the institution.
China’s State Council has designated April 29 to May 3 inclusive, as the festive break to mark Labour Day on May 1. The period is also sometimes referred to as “May Golden Week”.
The bank further noted regarding hotel sales at Macau casino resorts: “Out of the 26 hotels that we track, 14 hotels have rooms sold out or not yet released to cash-paying visitors for the May Golden Week period”.
In the pandemic-recovery phase, some Macau casino resorts have been limiting how much hotel inventory they release to the public, due to labour shortages. That was mentioned by Las Vegas Sands Corp, controller of Macau casino operator Sands China Ltd, on its first-quarter earnings call on Wednesday.
UBS said in its memo citing its own research, that for the April 20 to May 3 period inclusive, the average nightly room rate among hotels in the Macau market was circa HKD5,500 (US$700.69), which it said was “tracking above Chinese New Year levels,” a reference to another peak business period. The latest Chinese New Year, in late January, had been the first without travel restrictions, since the 2019 festival.
Brokerage CLSA Ltd also said in a recent note that demand for hotel rooms in Macau for the May Golden Week was “strong”.
“The key focus will be hotel occupancy during May Golden Week … as well as momentum in the premium gaming segments (mostly the premium mass) which has been a key recovery driven year-to-date,” stated the institution.
It added: “Forward looking indicators imply solid demand for hotel rooms during the Labour Holiday, with 15 of the 27 properties we track booked-out as of 14 April 2023.”
UBS said in its memo that over six days recently, Macau casino gross gaming revenue (GGR) had been averaging MOP417 million (US$51.6 million) per day, up on the MOP400-million daily average across 10 days before that.
It meant that Macau market wide – for VIP play and mass play combined – the most recent daily-GGR average was tracking at about 52 percent of second-quarter 2019. Mass play by itself, was “65 percent to 75 percent” of mass GGR from second-quarter 2019, suggested UBS.
“By segment, month-to-date VIP volume was up 5 percent month-on-month, with VIP hold at around 2.5 percent, while mass was up 2 percent to 3 percent month-on-month,” said the bank.
In its Tuesday note, CLSA forecast Macau’s second quarter casino GGR to reach HKD39.1 billion, up 16.4 percent quarter-on-quarter.
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