Macau Golden Week Not Looking So Golden Due to Casino Comps, Reduced Customer Spend
Posted on: September 25, 2019, 10:53h.
Last updated on: September 25, 2019, 11:33h.
Macau’s approaching Golden Week holiday might not deliver the Chinese enclave the annual influx of business and gross gaming revenue (GGR) it typically does.
Though bookings are strong, gaming industry analysts say casinos are dishing out far higher comps and incentives to lure vacationers to the Special Administrative Region during the October 1-7 holiday.
“While hotel bookings are solid, we expect the quality of the customers will be lower (i.e. lower spend per head) this year,” said Sanford C Bernstein analysts Vitaly Umansky, Eunice Lee, and Kelsey Zhu.
Room comps will be high during the period, but likely go to an average lower-spend customer than in 2018. Consequently, higher-end play will likely remain tepid during Golden Week and during the whole of October,” Bernstein concluded.
GGRAsia went property by property online to see if rooms were available, and found that 13 resorts were sold out for at least five nights during the week. They include Cotai Strip’s Wynn Palace, MGM Cotai, and the Ritz-Carlton and Marriott at Galaxy Macau.
Casino.org can report that in addition to the aforementioned sold-out properties, The Venetian says it has no rooms available for the duration of Golden Week.
Rate Dips, Visitor Gains
Morgan Stanley analysts echoed Bernstein in forecasting a drop in room revenue, which they expect to correlate to reduced GGR. The financial services corporation says the increase in room comps will lead to average daily rates decreasing by as much as 50 percent compared to Golden Week 2018.
The Chinese economy is slowing, and the country’s trade war with the US continues to threaten further difficult times. That is why many Macau casinos are using added perks to entice mainlanders to visit the enclave during the holiday.
For those not fortunate enough to be offered comped or reduced rooms, rates for the general traveler are high. At The Parisian, a seven-night stay in a deluxe room will is quoted at HK$24,251 ($3,093). At Morpheus, a week-long stay in a king room is $6,810.
The Macau Tourism Office says more than 890,000 visitors ventured to the gaming hub during last year’s Golden Week. Officials are expecting a 15 percent surge this year, as the mass market continues to invade the enclave, with the Macau-Hong Kong bridge making the region much more accessible.
The People’s Republic of China rolled out the Golden Week holiday in 1999 in an effort to expand domestic tourism and improve the standard of living for its citizens. The vast majority of employers afford their workers the entire week off.
Its accompanying Spring Festival – another week-long holiday – is considered the largest annual human mass migration in the world.
Analysts believe a slow Golden Week in terms of GGR will only further push 2019 casino win down. Morgan Stanley recently lowered its annual GGR expectations from -1 to -3 percent. The firm also reduced its 2020 casino win outlook from eight percent growth to three percent.
The 20th anniversary celebration of Macau’s return to China from Portugal in December is expected to hinder casino activity, as dignitaries and guests occupy rooms for the festivities.
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