Strong Oct Golden Week GGR for Macau casinos: analysts
Macau’s casino sector posted a strong revenue performance in the first seven days of October, the period of China’s Golden Week holiday marking National Day, say several brokerages.
Average daily revenue (ADR) in Macau casinos rose to about MOP1.2 billion to MOP1.3 billion (US$162 million) between October 1 and 7, wrote brokerage JP Morgan Securities (Asia Pacific) Ltd in a note issued on Tuesday.
“This implies that ADR grew well over 15 percent year-on-year, and that ‘total GGR’ during Golden Week grew high-single-digit year-on-year,” analysts DS Kim and Sean Zhuang said.
They however noted the latter was not “an apples-to-apples comparison, as we are looking at seven-day GGR versus eight-day GGR last year.”
Mr Kim and Mr Zhuang added: “This is better than our expectations of approximately 5 percent growth, and likely ahead of the market’s.”
China’s State Council declared October 1 to October 7 as this year’s National Day holiday period. But September 29 and 30 immediately beforehand were weekend days this year, meaning some spillover in terms of tourism arrivals had been expected.
The 2017 National Day break lasted for eight days according to the State Council, as it included the Mid-Autumn Festival, which fell on October 4 last year, a Wednesday.
Brokerage Sanford C. Bernstein Ltd in Hong Kong said in a note on Monday it estimated Macau’s ADR for the first seven days of October had been MOP1.3 billion.
“Mass volume is estimated to be up 22 percent to 23 percent, with VIP volume estimated to be up 15 percent,” stated Sanford C. Bernstein’s analysts Vitaly Umansky and Kelsey Zhu. “Other than visitation growth, better quality players helped drive VIP and mass GGR growth,” they added.
Visitor arrivals to Macau during October Golden Week rose by 7.2 percent, to a total of more than 895,000, show data issued on Monday by the Macao Government Tourism Office (MGTO).
Local hotels reported an average occupancy rate of 92 percent during the Golden Week period, a decline of 0.6 percentage points in year-on-year terms, according to MGTO. The bureau added that the average hotel room rate in Macau for the Golden Week period was about MOP1,942.0, a year-on-year increase of 10.1 percent. The average room rates of five-star and four-star hotels stood at around MOP2,270.30 and MOP1,546.10 respectively, up by 11.0 percent and 15.8 percent.
In a research note issued on Monday, the Instinet LLC research arm of Japanese brokerage Nomura said, regarding the outlook in the Macau casino market or the remainder of October: “We estimate October GGR will be up approximately 5 percent to 10 percent year-on-year.”
Analysts Harry Curtis, Daniel Adam and Brian Dobson added: “Our October estimate implies 220 basis points to 720 basis points of accelerating GGR growth versus last month’s +2.8 percent [growth] number, given stronger-than-expected demand during Golden Week.”
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