Macau casinos are probably happy given their recorded numbers for the first four days of the Lunar New Year. The celebration has brought visitors to Macau, increasing the number of travelers by ten percent. Lunar New Year is also the beginning of the Year of the Dog.
The Macau Government Tourism Office said the numbers are up from February 15th to the 18th. This places the travelers to the region at over 500,000 people. Approximately 354,000 visitors are from Mainland China, which is 18.5 percent higher than in 2017. Macau’s tourism representative thought the total visitation for the Lunar New Year holiday would be 1 to 3 percent higher overall compared to last years 935,000 visitors.
She also indicated that just because the number of people coming to the island is up this does not mean gaming revenue will show a significant increase. A part of the reason these figures may not indicate a correlation is due to Chinese VIPs. These VIPs are the majority of the revenue, and they tend to avoid Macau during Lunar New Year due to the increase in visitors.
Despite the lack of VIPs to the island who are usually there in lower tourist times, the casinos are going to show double-digit revenue for the week. Certain casinos that focus on mass-market gamblers will be the most notable resorts in the news regarding decent revenues. MGM’s Cotai and Sands China tend to attract the mass market gamer.
The downside for MGM Cotai is their rushed launch. They attempted to open in time for the Lunar New Year celebration; so only 500 of the 1,390 hotel rooms are available for guests. It will limit their revenue of record for the period.
An analyst for Morgan Stanley said the MGM Cotai is a “top pick” for casinos in Macau to gain from mass market traffic. It does make the revenue more volatile, and there is a possibility of showing slower gains due to their target market.
Macau has been in need of revenue increases after their struggles in the last few years. Showing year on year upwards trend is an indication that things may be changing for Macau. However, one good year or new direction does not mean the trouble for Macau is over. Regulations from China are still going to affect the market, as well as the crackdown on improper junket operations.