The daily run-rate of gross gaming revenue (GGR) for the May Golden Week from May 1 to 5 is projected to reach a “strong” MOP630 million per day, standing at around 60% of 2019 Golden Week’s levels which reached up to MOP1.1 billion, according to the latest forecast released yesterday by JP Morgan.
The brokerage’s prognosis of Golden Week GGR in May remarkably outperformed its earlier forecast, published days ago on May 6, of just 40% to 50% of 2019 levels.
However, analysts DS Kim, Derek Choi, and Livy Lyu acknowledged their estimation for GGR during the five-day May Day holiday may seem too ambitious to other brokerages and is “well above the highest expectation in the market.”
In the seasonal lull from May 6 to 9, the daily run rate of GGR is expected to slow down and hover at around MOP340 million. Despite that, “this also seems meaningfully better than recent non-holiday run-rates of MOP270-280 million per day in March and April,” said JP Morgan.
By segment, the GGR volumes generated by the mass and VIP market are expected to return to 70% and 25% of 2019 Golden Week levels, respectively.
With the GGR growing rapidly against a mild recovery rate of tourist arrivals across the holiday, which amounted to only around 25% of pre-pandemic levels, JP Morgan said, “This reflects a strong rebound in the premium mass segment and extended length-of-stay, which in turn should alleviate market concerns on potential spill-over from VIP on premium mass.”
On the other hand, the demand among customers in the low-end base mass-market stays was suppressed due to a ban on the issuance of group tour visas by the Chinese government, and continual border closure between Hong Kong and Macau.
“But we’re hearing from local travel agencies that package or group tours to Macau might resume soon, which – if it happens – would be a significant boon for a mass recovery,” the brokerage said.
The GGR for the whole month of May is expected to tip MOP10 billion, representing 40% of 2019 levels. The growth rate is expected to further pick up in peak travel season in July and August and reach as high as MOP11 billion to MOP12 billion, or 50% of 2019 levels.
The GGR in June may continue to stay sluggish, as June is habitually the lowest season or month of the year, JP Morgan stated.
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