Gross gaming revenue in the mass market segment returned to between 30% and 35% of 2019 levels during the recent National Day Golden Week holiday, suggesting strong pent-up demand in the segment according to investment bank JP Morgan.
In a Monday note, JP Morgan’s Head of Asia Gaming Research, DS Kim, said Macau-wide GGR for the first nine days of October, which includes the seven days of Golden Week from October 1, was estimated at MOP$1.7 billion (US$210 million) or MOP$190 million (US$23.5 million) per day. This, he said, was double September’s run-rate of MOP$99 million (US$12.2 million) per day.
Although “not as golden as some had hoped,” the early October run rate was primarily driven by mass market gaming with VIP improving by only a single digit percentage.
“This … looks very respectable to us considering: (1) there still are meaningful travel frictions for a Macau trip, as eVisa and group tour visas have not yet resumed and (2) even domestic mobility hasn’t fully normalized, with China’s domestic tourism revenues falling 26% year-on-year to be only 44% of pre-COVID levels, not too far from Macau’s mass recovery,” Kim said.
“We’d even go on and say that pent-up demand for Macau mass gaming seems pretty solid, certainly better than what we had expected only weeks ago.”
Kim added that the return of package tours and eVisas for mainland Chinese visitors to Macau from next month should boost visitation and demand from December, with mass GGR forecast to return to between 40% and 50% of pre-COVID levels by the end of this year as a result.
“We model sequential improvements in mass GGR and industry profits throughout 2023, before hitting full recovery by 2024,” he said.
According to JP Morgan estimates, Macau GGR will reach 42% of 2019 levels next year with mass gaming back to 63%, climbing to 66% of 2019 levels in 2024 with mass at 100% but VIP at just 12%.
