May revenue from the casino sector has seen a surge of 366% from a year ago to total MOP15.6 billion in May, again hitting a three-year high following the end of pandemic-related restrictions that led to heavy losses and economic downturn.
The monthly take was bolstered by a five-day national holiday that saw around 300 travel groups and nearly 500,000 visitors. The number of visitors rose more than 262% from the May Day holiday of last year and recovered to about 62% of the level in 2019 before the Covid-19 pandemic.
Previously analysts forecasted that casino floor revenues will reach a new post-pandemic high of MOP15.5 billion in May, which translates to an average daily casino floor income of around MOP500 million, according to JP Morgan analysts DS Kim and Mufan Shi.
The ongoing robust recovery, according to the firm, shows elevated baseline demand levels, similar to what was seen during the Lunar New Year in late January this year.
Only in the first four months of the year, gross gaming revenue surpassed the total amount generated in the whole of last year, as it recorded MOP49.23 billion, which is 16.7% higher than the MOP42 billion recorded in all of 2022.
For the first five months in 2023, revenues aggregated MOP64.93 billion, up 172.9% year-on-year.
Meanwhile, according to a provider of macroeconomic intelligence, Macau is forecasted to grow at the world’s second-fastest rate over its forecast horizon.
FocusEconomics, however, stated that, “this will largely reflect a base effect following one of the world’s steepest pandemic-related downturns, rather than strong underlying growth prospects.”
“The strong growth projections for the coming years hinge on an eventual loosening of China’s Covid-19 stance and a subsequent rebound in foreign visitor arrivals,” yet risks include the SAR’s reliance on gaming and mainland visitors.
FocusEconomics estimates that the average growth of the SAR’s economy stands at 11.9% from 2022 to 2026.
“Macau’s recovery remains contingent on a recovery in Chinese visitors, which Economic Intelligence Unit (EIU) does not expect to significantly materialize until after mid-2023. Recurring outbreaks will still keep gambling and tourism activity below pre-crisis levels until beyond 2024,” stated EIU.
Echoing similar sentiments was Ben Lee, managing partner of IGamiX Management & Consulting, who stated that Macau’s recovery is “riding on the back of a domestic revenge travel phenomenon.”
Speaking to Bloomberg, the gaming expert remarked, “Macau is benefiting from the lack of Chinese traveling overseas right now. Chinese aviation authorities reported that international flights to and from China are down 70% compared to 2019.”
With the gaming operators’ added impetus to build non-gaming offers and boost revenues from the non-gaming sector, Lee laments that amid billions of investments in the MICE industry from the big six, “it is not one of our key competencies.”
“We don’t have the labor. In terms of infrastructure for getting around Macau, we don’t have that either. For Singapore, despite being a so-called western market, their non-gaming revenue at best was about 13%. Ours, historically, was 5%. So yes, we may move the needle, but don’t expect any major movement,” said Lee.
