Macau Casinos Suffer Largest Monthly Revenue Decline in Nearly Three Years, Analysts Believe Worst is Over
Posted on: May 1, 2019, 09:02h.
Last updated on: May 1, 2019, 09:02h.
Macau casinos recorded their largest month-to-month gross gaming revenue (GGR) decline in nearly three years, as April win plummeted 8.3 percent, the biggest percentage drop since June 2016.
The six licensed casino operators reported casino win of MOP23.59 billion ($2.92 billion). That’s more than a quarter of a billion dollars fewer than the gaming floors took in during March. April 2018 GGR totaled $3.2 billion.
GGR January through April in the world’s richest gambling hub now stands at $12.35 billion, a 2.4 percent year-over-year loss.
China’s slowing economy is the culprit for the enclave’s gaming revenue slowdown. However, many analysts – and casino executives – believe the worst is over.
A weakening yuan, and ongoing trade talks between China and the US continue to cast uncertainty across Macau. Three of the Special Administrative Region’s (SAR) license holders are American companies – Las Vegas Sands, MGM Resorts, and Wynn Resorts.
Economic observers have said in recent months that the trade tensions could prevent those operators from making further investments in their properties. That hasn’t been the case. MGM Resorts recently opened its ultra-luxury villas at MGM Cotai, and Sands is spending $2 billion to build The Londoner at its Sands Cotai Central complex.
Gaming analysts believe Macau has weathered the economic storm. The general consensus for May is GGR growth of two percent, followed by further momentum in the second half of the year.
Macau is the number one gaming market in the world, but we all know it can be volatile,” MGM Resorts CEO Jim Murren said. The chief executive added that he believes moving ahead it will be “a very strong market.”
The overall expectation is for Macau GGR to come in flat or in single-digit growth this year. Any gain would mark the enclave’s third consecutive yearly increase. Casino win was $37.855 billion in 2018.
Tourism, Business Growing
The mass market continues to player a greater role in Macau’s overall gaming industry. This week’s Labor Day holiday – which is officially designated by China’s State Council as running May 1 through May 4 – is keeping enclave casino hotels booked.
The Macau Government Tourism Office expects visitor arrivals to surge 20 percent for the 2019 holiday. Asian gaming media outlet GGRAsia reports that 18 of Macau’s 23 five-star hotels are fully booked for the four days.
Macau welcomed a record 35.8 million visitors last year, a 10 percent increase on 2017. The October opening of the Hong Kong-Zhuhai-Macau Bridge has reduced automobile travel between the two densely populated SARs from four hours to 35 minutes.
China wants Hong Kong and Macau to work together to transform the Greater Bay Area into a Silicon Valley-type technology and innovation hub. The mainland government has additionally advised Macau to reduce its dependency on gaming, and part of that will be accomplished by allowing casino operators to develop non-gaming entertainment attractions and convention spaces on the neighboring Hengqin Island.
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