Senior executives at two Macau casino operators have expressed caution regarding the outlook for their respective gaming businesses during China’s National Day holiday period.
Ambrose So Shu Fai, vice chairman and chief executive of SJM Holdings Ltd, was cited by Hong Kong’s Chinese-language news outlet Ming Pao as saying that he observed a “so-so” performance in terms of both VIP gaming in the run-up to so-called “Golden Week”, and bookings for the holiday period for hotel rooms under his firm’s management.
Francis Lui Yiu Tung, deputy chairman of fellow Macau operator Galaxy Entertainment Group Ltd, said on Sunday that the gaming business of Macau casino operators was still being affected by the ongoing United States-China trade war.
China’s State Council has declared October 1 (Tuesday) to October 7 (the following Monday) as this year’s National Day holiday period. The festive break is often referred to in China as autumn Golden Week.
SJM Holdings’ Mr So said he expected tourists from mainland China to choose Macau over Hong Kong for trips during Golden Week. Hong Kong has been affected by months of street protests aimed mostly against the local government there. Nonetheless Mr So expressed concerns over how much mainland visitors might spend in Macau.
Galaxy Entertainment’s Mr Francis Lui referred in his comments – made to Chinese-language newspaper Macao Daily News on the sidelines of a weekend event in the city – to problems that had arisen in relation to a “neighbouring city”. While Mr Lui did not mention a name, it was understood to be a reference to Hong Kong.
A survey last week by GGRAsia suggested significant advanced bookings of hotel rooms for Golden Week. Nonetheless, brokerage Sanford C. Bernstein Ltd had said in a September 23 memo it expected the quality of the gaming customers to be “lower” than during autumn Golden Week last year.
A senior official of Macao Government Tourism Office (MGTO) was quoted last week as saying the city anticipated a possible 15 percent year-on-year rise in visitor numbers during Golden Week.
Macau received more than 890,000 visitors during the October 1 to October 7 period in 2018; nearly 95 percent of them from what were termed “Greater China” markets, according to data from MGTO. The term is typically a reference to the mainland, Hong Kong, and Taiwan. The average hotel occupancy rate of the city’s hotels during autumn Golden Week last year was 92 percent, while that specifically for five-star hotels was 94 percent.
The average room rate of the city’s five-star hotels in the National Day period in 2018 was MOP2,270.30 (US$281), MGTO’s data showed.
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”Many investors cite Golden Week as a catalyst to significant, sustainable visitation increases and a showcase for profitability for many casinos [in Macau]... However… we are concerned recovery estimates may again be pushed back”
Analyst at Roth Capital Partners