- Legal States
Mike Johnson November 25, 2020 3 min read
Bernstein: Macau’s Recovery Goes through Mass Premium Sector
Sparkling casinos and world-renowned hotels welcome tourists in Macau, a former Portuguese colony that has now become a Special Administrative Region of the People’s Republic of China. Travellers particularly appreciate the mix of Las Vegas-style rhinestones and rich history.
As tourists are not all there for gambling, specialists said that there still was a parallel between the amount of people coming in the city and casinos output .
Indeed, since the end of 2019, the Covid-19 pandemic has had disastrous consequences in Macau’s casinos area and one brokerage firm said it is “now not assuming” that recovery will be possible before 2023.
One short-term solution among others would be to focus on the premium mass sector, permitting casinos to regain lost gross gaming revenue, as the city has announced a 64% gross domestic product (GDP) drop in the 3rd quarter of 2020.
Macau’s Baccarat Boosts Results in Q3, 2020
Macau’s baccarat produced MOP2.34 billion (US$293.0 million) revenue in Q3: it is a 92.5% decrease over one year. VIP baccarat had a market share representing 47.9% over that period of time and mass market baccarat totaled a market share of 38.40%, about MOP1.88 billion.
However this specific time of the year was the least hard for the city since the pandemic started last year: daily tourist flow coming in Macau in mid-November was about 20,600, compared to 19,000 in October, said the director of Macau Government Tourism Bureau Maria Helena Senna de Fernandes during an assembly of the city’s Tourism Development Committee.
Analysts of Sanford Bernstein stated that “in the early stage of recovery, non-Guangdong visitors returned faster than Guangdong’s due to stringent visa restrictions of the latter”.
Macau is also focusing on the sport sector and plans on hosting several events from next year, initiatives that will for sure put the city on the right track of recovery.
In the long term, analysts Vitaly Umansky, Tianjiao Yu, Kelsey Zhu and Xiaonan Zhang expect “Macau GGR to grow at a 2 percent compound annual growth rate (CAGR), driven by 6 percent CAGR in mass (in particular, premium mass) while negatively impacted by -4 percent CAGR in VIP”, over the time frame 2020-2023.
Premium mass market could bring in a lot more gamers in casinos, but Macau also needs to bring up new perspectives and new ways of attracting tourists and vary its possibilities of leisure in order to increase its GDP.
Chief Executive Ho Iat Seng presented the approach for next year and beyond, involving sports and casinos.
Mike made his mark on the industry at a young age as a consultant to companies that would grow to become regulators. Now he dedicates his weekdays to his new project a the lead editor of GamblingNews.com, aiming to educate the masses on the latest developments in the gambling circuit.
Industry November 25, 2020
Industry November 25, 2020