Citigroup has adjusted its estimate for Macau’s gross gaming income (GGR) for September, decreasing its forecast from MOP$18.25 billion to MOP$17.75 billion (US$2.21 billion). This modification follows a big 10% decline in GGR through the week from September 9 to fifteen. Based on Citigroup analysts George Choi and Ryan Cheung, Macau’s GGR for the primary 15 days of September is now estimated at MOP$8.5 billion (US$1.06 billion), with a each day run fee of MOP$536 million (US$66.8 million) throughout that interval, down from earlier estimates. The analysts attribute the decline to lower-than-expected volumes in each the VIP and mass gaming segments.
Weakening VIP and mass market volumes:
The drop in GGR is essentially pushed by decreased betting exercise in each VIP and mass gaming sectors. As Inside Asian Gaming studies, VIP volumes have reportedly declined by 8% to 10% month-on-month, whereas mass gaming volumes have dropped by 10% to 12%. Compounding the problem is a decrease VIP maintain fee, which measures the share of complete bets that casinos retain as income, indicating decrease profitability from high-roller betting.
Regardless of these figures, Citigroup analysts consider the softness could possibly be short-lived. They speculate that some gamers have delayed their journeys to Macau till the Mid-Autumn Competition, which runs from September 15 to 17, probably boosting GGR later within the month. However, the revised forecast represents a cautious outlook for the rest of September, with Citigroup predicting a each day run fee of MOP$617 million (US$76.9 million) via the remainder of the month. The up to date forecast nonetheless represents a 19% year-on-year enchancment over September 2023, returning GGR to roughly 80% of its pre-pandemic ranges from 2019.
This newest downgrade is just not the primary adjustment to Macau’s September GGR forecast. As GGRAsia studies, earlier within the month, Citigroup lowered its preliminary projection of MOP$18.5 billion to MOP$18.25 billion, citing minor disruptions brought on by Storm Yagi. The storm, which hit the area in early September, triggered momentary declines in customer numbers and gaming volumes. Regardless of the damaging short-term affect, Macau’s GGR has been trending upward all through 2024, fueled by the return of worldwide tourism and elevated exercise within the gaming sector.
Looking forward to October Golden Week:
Whereas September’s GGR might fall wanting earlier projections, analysts are optimistic concerning the upcoming October Golden Week, a significant vacation interval in China that’s anticipated to drive important tourism and gaming income in Macau. Morgan Stanley Asia Ltd. predicts that in Golden Week, each day GGR might attain as excessive as MOP$900 million (US$112.1 million), with full-month GGR probably exceeding MOP$20 billion, in line with GGRAsia. If this determine is achieved, it could mark a 1% enhance in comparison with October 2023.
Morgan Stanley’s analysts, Praveen Choudhary and Gareth Leung, consider that mass market gaming through the October vacation might get better to 114% to 115% of 2019 ranges, whereas VIP gaming is predicted to stay weaker, recovering to only 23% to 25% of pre-pandemic ranges.
The Macao Authorities Tourism Workplace (MGTO) is anticipating a surge in customer arrivals throughout October’s Golden Week. The director of the MGTO, Maria Helena de Senna Fernandes, has projected that Macau might see 100,000 guests per day through the vacation interval, which runs from October 1 to October 7. Nevertheless, Morgan Stanley analysts counsel this estimate could also be conservative, as Macau noticed a median of 118,000 each day guests in August. Utilizing historic knowledge from 2019, which noticed a 20% enhance in customer numbers throughout Golden Week in comparison with July and August, the establishment estimates that each day visitation might rise to 129,000 through the upcoming vacation.
