March 1, 2016 - 10:50 am
Chinese New Year visitation during February propelled Macau’s casino industry to its best month in almost two years.
The region’s Gaming Inspection and Coordination Bureau said Tuesday casinos collected $2.4 billion from gamblers during the month, a decline of less than 1 percent and the smallest drop in 21 months.
Tourism increased during the Chinese New Year holiday, helping a market that has suffered over the troubled Chinese economy and a government crackdown on corruption that ensnared high-end junket operators and slowed gambling activity by big spending customers.
“Clearly the Chinese New Year period was solid, especially as it relates to high-margin mass market business,” said Union Gaming Group principal Grant Govertsen, who is based in Macau. “We continued to observe higher than normal levels of mass-market foot traffic in the days and weeks after Chinese New Year ended.”
The month also was helped by Monday’s extra day thanks to leap year.
Govertsen said average daily gross gaming revenue during February was 4 percent higher than in October, which included the lucrative Golden Week holiday, and was 13 percent higher than the average of the previous two months.
Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said visitation statistics and mass market gaming fundamentals will “prove the most useful predictors of the Macau market’s overall health.”
Las Vegas Sands Corp., Wynn Resorts Ltd. and MGM Resorts International all operate resorts in Macau and are expanding their holdings, adding to a market that has three dozen large and small resorts.
Wynn Resorts plans to open the $4.1 billion Wynn Palace in June. Las Vegas Sands said it will open its $2.7 billion Parisian in September and MGM Resorts said last month it pushed back the opening of $3 billion MGM Cotai — originally set for December — to early next year.
Susquehanna International gaming analyst Rachael Rothman said Macau is only down 12 percent in the first two months of the year with March expected to have a better result from a year ago.
“The fact that for the first time in eight quarters, the quarterly estimates look achievable two months in, should be viewed as a positive by investors,” Rothman said.
She said the “supply shock” will come when Wynn Palace opens.
“The key will be if it can drive incremental growth for the market,” Rothman said.
Macau’s overall gaming revenue market fell to a five-year low in 2015 and there is still some caution by analysts.
“We don’t view the February result as emblematic of a distinct change in the market,” said Deutsche Bank gaming analyst Carlo Santarelli. “The holiday periods, given the influx of mass visitors and constrained VIP activity, are a bit more robust, on a relative basis, to the surrounding periods.”
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Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871. Follow @howardstutz on Twitter.