The impact of Typhoon Hato on Macau’s six casino operators has been described as marginal, with financial services firm Morgan Stanley predicting GGR growth to continue at better than 10% for mass and 20% for VIP through the remainder of 2017.
In a report released on Monday, analysts Praveen Choudhary, Alex Poon and Thomas Allen said 4Q17 gross gaming revenue would likely slow to +16% year-on-year from +21% in the previous quarter “mainly due to a base effect” but that the signs remained strong despite the arrival of Typhoon Hato on 23 August.
“The impact of Typhoon Hato was marginal on six casino operators and traffic and revenue were back in a couple of days, especially in Cotai,” they said. “The current quarter is tracking at +6% GGR growth quarter-on-quarter, as September has been strong and forward booking for longer than the usual Golden Week in October is strong as well.
“We estimate that mass revenue growth for July and August were 12% and 9% year-on-year respectively and should remain above 10% for the rest of the year. More rooms have been opened by smaller junkets (such as David Group), which should drive VIP growth above 20% year-on-year for next few months of the year.”
Morgan Stanley pointed to short-term unforeseen impacts as having the biggest financial impact on operators following Typhoon Hato, including overtime and increased staffing for clean-up, but added “these issues appear temporary and insurance should pay for most of the damage.”
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