GGRAsia – More working in Macau gaming despite downturn

More working in Macau gaming despite downturn

Jun 29, 2015 Newsdesk Latest News, Macau, Top of the deck

The number of people – residents and non-residents – employed in “gaming and junket activities” in Macau rose 1 percent in the March to May period inclusive, compared to the previously measured period of February to April, despite the reported redundancies that have occurred in Macau’s VIP gaming segment.

The data were released on Monday by the city’s Statistics and Census Service. The total employed in gaming and junket activities rose to 84,600, from 83,800 in the three months to April 30, said the statistics service.

But the city’s overall unemployment rate rose by 0.1 percentage point to 1.8 percent in May, after more than a year at 1.7 percent.

Investment analysts at Morgan Stanley Asia Ltd said in a report on June 16 that the city’s casino operators had “limited room to cut costs”, adding it expected them to move some existing – and currently in the gaming downturn, underused – staff from already operational properties to the new ones on Cotai when they open.

“Operators now expect wage hikes in line with CPI [consumer price index] of 5 percent per annum in coming years, but given negative organic [gaming] revenue growth, margin erosion is meaningful. Existing casinos are hoping 5 to 15 percent of their staff join upcoming new casinos; so Sands [China Ltd], MGM [China Holdings Ltd] and SJM [Holdings Ltd] are carrying excess staff for longer.”

Macau’s accumulated casino gross gaming revenue for the first five months of 2015 stood 37.1 percent lower than in the same period in 2014, according to Macau government data.

Cotai openings

Galaxy Entertainment Group Ltd’s HKD19.6-billion (US$2.5 billion) Galaxy Macau Phase 2 and the revamped Broadway at Galaxy Macau opened on May 27. The US$3.2-billion Studio City, 60-percent owned by Melco Crown Entertainment Ltd is expected to be the next opening in Macau – on a date later this year yet to be confirmed.

The US$4.1-billion Wynn Palace on Cotai is due to open in “the first half of 2016”, according to a filing from Wynn Macau Ltd in May. MGM Cotai, from MGM China, has a capital budget of US$2.9 billion, excluding land costs and capitalised interest, and is due to open in the autumn of 2016, according to filings by the parent MGM Resorts International.

The Parisian, a new US$2.7-billion resort from Sands China, is likely to have a first phase opening between “late summer to November 2016”, said the parent Las Vegas Sands Corp in April. SJM Holdings’ HKD30-billion Lisboa Palace is scheduled to be “ready” by the fourth quarter of 2017, the firm said in February.

The number of imported workers – popularly known as blue card workers – in Macau’s “recreational, cultural, gaming and other services” sector rose 7.5 percent year-on-year in May, said the city’s Human Resources Office.

There were 13,847 non-resident workers in recreational, cultural, gaming and other services as of May 31, according to the Human Resources Office. There were 12,885 in the year-prior period. There is no breakdown available in official published data for gaming workers-only among the non-resident population.

Both sets of non-resident worker numbers include non-resident construction workers that are directly employed by casino companies. Among that latter group of workers, the rise was 16.7 percent year-on-year in May, to 1,856 people, from 1,591 people in the year-prior period.

The number of imported workers across all sectors of the local economy reached 179,416 at the end of last month, up 17.8 percent year-on-year, said the Human Resources Office.

Mainland Chinese accounted for 65.3 percent of Macau’s non-local workers. Most mainlanders – 42,915 – were employed in construction. Some 71.6 percent of all non-resident workers came from either the mainland, Taiwan or Hong Kong.

Macau’s total workforce stood at 405,700 in the March to May period, according to the employment figures released on Monday by the statistics bureau, indicating non-residents made up 44.2 percent of the territory’s workforce as of May 31.