GGRAsia – Macau package tour incentives would be good idea: DB

Macau package tour incentives would be good idea: DB

Sep 25, 2015 Newsdesk Latest News, Macau, Top of the deck

A plan by the Macau government to introduce subsidies to organisers of package tour groups could be “good news” for the city’s mass-gaming segment, says a note by Deutsche Bank Securities Inc.

Local newspaper Jornal Tribuna de Macau reported on Thursday that the government is considering paying travel agencies a subsidy of MOP200 (US$25.10) for each package tourist that stays overnight in Macau. The Macau Government Tourist Office confirmed to the newspaper that it was studying the possibility of introducing such a subsidy but said it is still canvassing opinions from the industry.

But the director of the Macau Government Tourist Office, Maria Helena de Senna Fernandes, later on Thursday said the bureau was not considering subsidising accommodation for package tourists. Speaking to reporters, Ms Senna Fernandes confirmed that the government has collected opinions from the industry. She said that the bureau would soon announce a plan to boost package tours, although she did not disclose any details.

Deutsche Bank analysts Carlo Santarelli and Danny Valoy said in a note on Thursday before news of Ms Senna Fernandes’ comments emerged: “While we don’t necessarily believe the plan will stimulate a meaningful uplift in gaming play, we do believe it could prove to be supportive for occupancy growth and non-gaming spend.”

“Moreover, we believe that any potentially positive development for the gaming industry, stemming from a government or government associated agency, should be well received by investors,” the analysts added.

The structure of Macau gross gaming revenue (GGR) – for many years skewed in the direction of VIP gambling – has recently shown some signs of becoming more mass-market focused. Official data showed that mass revenue accounted for 44.5 percent of casino GGR in the second quarter of 2015, up from 41.8 percent in the previous quarter and from 39.9 percent in the prior-year period.

Visitor arrivals to Macau reached 31.53 million in 2014 – a new record for the city. About 14.57 million tourists used overnight accommodation in Macau last year, show government data.

The aggregate number of visitors however is trending down 3.2 percent year-on-year in the eight months to August 31, official statistics indicate. Macau August visitor volume fell 1.7 percent year-on-year to 3.03 million – still an improvement from the 7.6 percent decline in June and the 3.8 percent contraction in July.

(Update at 10.53am, Sept 25)