Macau Casino Bosses Remain Optimistic About 2020 Despite Continued VIP Decline
Posted on: January 20, 2020, 08:05h.
Last updated on: January 20, 2020, 11:18h.
Macau casino executives aren’t overly concerned regarding the year ahead, as several expressed their opinions that 2020 will see gross gaming revenue (GGR) increase.
Macau capped off 2019 in disastrous fashion, the six licensed casino operators reporting gaming win of $2.84 billion – a 13.7 percent drop and the market’s worst monthly decline since March of 2016.
Full-year casino win came in at $36.45 billion, a loss of 3.4 percent compared to 2018. December marked Macau’s 20th anniversary handover from Portugal to China, and People’s Republic President Xi Jinping’s visit kept many gamblers away because of restricted access and tight security.
The VIP segment continues to constrict, prompting some gaming industry analysts to voice less-than- hopeful GGR forecasts for 2020. But those who know the industry best, the chief executives, don’t share those same trepidations.
2020 will be a critical year for Macau. The gaming industry, which accounted for more than 85 percent of all tax revenue collected by the Special Administrative Region last year, is at a crossroads.
Fewer VIPs have led to the casinos diversifying their resorts to attract a wider demographic. Xi has also urged the enclave to reduce its dependency on gaming, and play a more substantial role in the Greater Bay Area. Macau is in the process of launching its own yuan-based stock exchange, which will help greatly in that mission.
The opening of the Hong Kong to Macau bridge, paired with more mass market appeal, has CEOs cautiously enthusiastic.
I don’t think it is as easy as in the past, but I’m still very positive that the future is going to be very bright,” MGM China CEO Grant Bowie said recently. “I think what we need to do is look for slow and steady increases, rather than very rapid increases.”
Bowie’s comments were reported by GGRAsia. SJM Holdings CEO Ambrose So added that he was “confident” regarding 2020. Sands China President Wilfred Wong said he was, too.
China New Year
The Chinese New Year, or Spring Festival, is scheduled for January 25. The 2020 holiday is the Year of the Rat, and the weeklong event runs through February 4. Most workers in China are afforded time off during the holiday week, and many have chosen Macau as the place where they’ll spend their time away from the office.
Per GGRAsia, 14 of the 19 luxury hotels on the Cotai Strip are fully booked for at least four of the seven days. The Macau Government Tourism Office says the region has 41,148 guestrooms.
Rates are, of course, much higher for the New Year. A Monday through Friday four-night booking at Melco Resorts’s Studio City for a standard room costs just shy of $3,000. That same room a week later will cost half of that total.
The Chinese New Year is traditionally a time to honor deities and ancestors, and pray for a good harvest. The Spring Festival is the largest annual migration of people. Showering on New Year’s Day is taboo, as Chinese people don’t want to wash away any good luck remaining from the previous year.