A China-based investment bank China International Capital Corp (CICC) forecast the earnings before interest, taxation, depreciation and amortization (EBITDA) for Macau’s casino industry is likely to rebound to 2019 figures in the fourth quarter (Q4) of 2021, according to a report released yesterday by GGRAsia.
CICC is anticipating EBITDA of the local casino industry to turn around from a negative value in 2020 to a positive USD4.45 billion for 2021, and USD9.66 billion for 2022.
The encouraging prospects for the industry, CICC explained, are partially driven by the forthcoming enlarged capacity within the sector that will be ramped up by some new and soon-to-be-launched hospitality projects in Cotai.
The particular resort projects that CICC stated would lead to an expansion in capacity include Sands China’s The Londoner Macau, which is scheduled to open its first phase on February 8; SJM’s Grand Lisboa Palace, a new resort in Cotai to be open in the first quarter this year; and the Phase 3 expansion project of the Galaxy Entertainment Group, which features a string of facilities such as an event facility – the Galaxy International Convention Center (GICC) which will be launched in the second half or the third quarter of 2021.
Another project expected to be launched by 2021 is the Nüwa hotel, a hotel under the City of Dreams currently under renovation, with its reopening date yet to be confirmed.
CICC’s promising projection is predicated on “permanent cost savings by gaming operators” following the coronavirus outbreak, as well as a projected rebound in the mass-market segment, which may result in a “gross gaming revenue (GGR) split gravitating to mass gaming driving higher EBITDA margin,” GGRAsia stated, citing a report recently published by CICC.
Prospects for overall GGR
CICC forecast the total number of hotel rooms to be up by 2,800 this year, or 7.5% on top of the current 37,293 rooms — which may act as a drawcard to entice more visitors to stay overnight, and eventually provide a fillip to the mass-market sector.
The financial institution also projects that Macau’s annual GGR for 2021 may surge by 168% from last year, predominantly driven by a gradual rebound in the mass segment — which CICC expects will have a year-on-year increase of 228% and account for up to 80% of the overall GGR in Macau in 2021.
On the other hand, the VIP segment would also see a 55% increase in 2021 compared to last year.
The up-to-date figures provided by the Statistics and Census Service already revealed an upward trend in the length of stay by visitors. In December 2020, the average length of stay of visitors increased by 0.3 days year-on-year to 1.5 days.
Macau welcomed 659,407 visitor arrivals in December 2020, up 3.6% month-to-month. Around 390,300 of them were overnight visitors, whilst the remaining 269,107 were same-day visitors.