Gaming | Visitors to Macau keeping tight hold on wallets

Mainland Chinese tourists poured into Macau in greater numbers during the week-long Lunar New Year holiday, even as many shunned neighboring Hong Kong again this year, but gambling revenues extended an almost two-year slump as high-rollers stayed home.
Macau had 793,598 visitor arrivals from mainland China during the Feb. 7-13 period, up 4.3 percent over the corresponding week last year in China’s lunar calendar, a peak season for the city, according to the Macau Government Tourist Office. While that was good news for the world’s largest gaming center, it didn’t help much to narrow a protracted slump in casino revenues.
Average daily revenue at tables during the week was HKD790 million, a 20 percent drop from a year ago, according to Nomura Holdings Inc. gaming analyst Richard Huang. Still, that was slightly better than forecast and led Nomura to predict that revenues for the full month will fall 6-10 percent from year-ago levels to HKD16.3 billion-­HKD17 billion.
“The growing number of tourists as well as high hotel occupancy rate don’t directly lead to the improvement of gambling revenue, as the visitation growth is mainly driven by tourists with weaker spending power,” Huang said of the Macau numbers.
Casino revenue in Macau has plunged for 20 straight months, following China’s crackdown on corruption and the slowing economy that has kept high-rollers away and also dented mass market arrivals. Gross gaming revenue in Macau fell 34 percent in 2015, a second straight year of decline. Although revenues are still down, improved projections for the year helped lift gaming gaming stocks.
Hong Kong fared even worse, with a 12 percent drop in mainland Chinese tourists arriving during the week, the second straight year of decline for the period. Chinese visitors are projected to fall 3.2 percent for the year, according to the Hong Kong Tourism Board, with average spending dropping 4 percent to HKD6,948.
Grant Govertsen, a gaming analyst in Union Gaming Group LLC, said the divergence in visitors to Hong Kong and Macau during Chinese New Year marked a departure from previous years when tourist arrival numbers for the two destinations have moved more in tandem.
Mainlanders are perhaps actively avoiding Hong Kong for political reasons, he said. Tourist numbers dropped off in the aftermath of the Umbrella Movement in 2014 when protesters blocked city roads for more than two months to demand the right to pick the city’s leader.
Tensions flared again this year during the Chinese New Year holiday, when officials tried to clear illegal food stalls in the densely populated Mong Kok district, leading to a riot.
A sustained decrease in mainland visitors and the diminished buying power of a weaker yuan led to a second straight annual decline in Hong Kong retail ­sales in 2015. The overall sales fell 3.7 percent last year while the hardest-hit jewelry, watches, clocks and valuable gifts sales slumped 16 percent.
Chow Tai Fook Jewellery Group, the world’s largest listed jewelry chain, said last month that sales during Chinese New Year would be challenging. Emperor Watch & Jewellery Ltd blamed a preliminary 2015 loss on strong Hong Kong dollar, high rental pressure in the city and austerity initiatives in mainland China. Daniela Wei, Bloomberg