Macau’s 2025 growth trajectory will be aided by stabilizing China consumer sentiment and normalized competition from regional travel destinations in 2025, according to investment bank Jefferies.
In an investors’ note issued Thursday, Jefferies analysts led by Anne Ling forecast Macau GGR to grow by around 8% year-on-year to MOP$245 billion in 2025, with mass GGR up 10% and VIP by 3% compared with 2024 levels. Visitor arrivals should grow by around 5%, with visitation from mainland China accelerating faster than those from Hong Kong.
This forecast, Jefferies said, is based on no further deterioration of consumer sentiment, with Chinese government policy to stimulate the China economy by the end of 2024, and competition from other travel destinations to normalize.
“With 70% of its annual visitors from mainland China, the state of economic environment is most important,” the analysts wrote, noting that property prices and employment rates will be key in consumers’ willingness to spend. “According to [the International Monetary Fund], the market expects real GDP growth of 4.5% [in 2025] and CPI growth of 0.7%.
“Due to weaker than expected macro trend, investors in general felt that there were downside risk with limited visibility until end of September. With stimulus policies announced in late September 2024 to support the economy, we expect no further deterioration on consumer sentiment.”
On travel sentiment, Jefferies said, “2024 has been a tough year in attracting tourists to Macau, with visa approvals in other destinations relaxing and air fares normalizing.
“That said, visitor arrivals growth was a respectable 30% year-on-year for 9M24, recovering to 86% of 2019’s level. This compared to 70% recovery rate vs 2018 of Hong Kong’s visitor arrivals during 9M24.
“We expect 5% visitor growth in 2025 and mainlanders to account for 71% of the total tourist arrivals in 2025. From 2025 onward, we believe the base effect to normalize. In addition, both gaming and non-gaming infrastructure should continue to attract players and visitors.”
Jefferies has named Sands China and Galaxy Entertainment Group as its top picks for the Macau gaming sector in 2025, with their larger hotel room supply to provide greater exposure to the ongoing recovery of base mass consumers.
Sands, it said, will benefit from the completion of its Londoner Macao enhancement program while Galaxy will see further benefit in premium mass from the opening of the all-suite Capella.
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