Macau Golden Week Welcomes 985K Visitors, But Casino Room Rates and VIP Play Down
Posted on: October 8, 2019, 01:32h.
Last updated on: October 8, 2019, 02:21h.
Macau Golden Week saw visitor arrivals surge during the October 1-7 holiday, but the quality of the average traveler was reduced due to fewer VIPs.
The Macau Government Tourism Office (MGTO) says 984,996 people visited the enclave during the 2019 week-long celebration. That’s an 11.5 percent increase – or 101,711 more people – than in 2018.
“The surge in visitor arrivals during this 1st October Golden Week met the expectations, which was possibly attributed to the inauguration of the Hong Kong-Zhuhai-Macao Bridge, which further enhanced the regional transport network,” a MGTO statement explained.
However, there’s little correlation between visitor numbers and gross gaming revenue (GGR). In Macau, the Chinese Special Administrative Region (SAR) is amid a changing customer demographic, as casinos have attempted to reduce their reliance on high roller VIP play.
JPMorgan said in a note prior to the kickoff of Golden Week, “While hotel bookings are solid, we expect the quality of the customers will be lower.”
Gaming Revenue Recap
In a note from Sanford C. Bernstein – first reported by Asia Gaming Brief – analysts report that VIP play was “tepid” during Golden Week, and will likely stay that way throughout the month.
Bernstein estimates that Macau casinos won a tad shy of $1 billion during the seven-day period. That comes out to an average of about $140 million per day.
As we have expected, based on conversations with industry participants, higher end play was tepid during the Golden Week, and will likely remain so,” the note stated.
Chinese property information portal Zhuge.com relays that home sales were down this Golden Week, another sign that mainlanders are concerned with their country’s weakening economy and ongoing trade war with the US.
The social unrest in Hong Kong led to a drastic reduction in visitor arrivals there. Experts speaking with the South China Morning Post forecast that the protests cost Hong Kong HK$2.8 billion ($356 million) during the 2019 holiday week.
Occupancy Up, Rates Down
When demand increases, one typically expects to see costs for the product desired to increase. But that was the exact opposite of what Macau experienced during the 2019 Golden Week.
With fewer VIPs coming to the world’s richest casino hub, resorts offered more comps and incentives to the general public. As a result, guestroom rates declined.
The MGTO says the average occupancy rate overall increased two percent, but the average nightly rate declined 5.1 percent.
Hotel – Occupancy Percent – Cost
5-star 95.2 (+1.2 percent) $277 (-1.5 percent)
4-star 92.6 (+2.5 percent) $148 (-22.7 percent)
3-star 94.7 (+3.6 percent) $150 (-3.8 percent)
2-star 82.4 (+9.5 percent) $117 (-4 percent)
Guesthouse 75.6 (-2.7 percent) $87 (-6.7 percent)
As shown above, the four-star properties were most impacted by the decline in high rollers, and were therefore forced into lowering their rates to keep their rooms occupied. Three-star rooms have actually been going for higher rates in 2019 than four-star occupancies.
Four-star hotels include Holiday Inn Cotai Central, the Golden Dragon, and Beverly Plaza.