Investment bank Citigroup says Macau concessionaires boasting facilities that allow them to host large-scale events are best placed to produce above-industry EBITDA growth in the long-run as international artists, promoters and ticketing platforms increasingly recognize the global casino hub as a source of future earnings growth.
In a lengthy note delving into the recent trend of high-profile concerts driving gaming revenues across Macau, Citi analysts led by George Choi said Galaxy Entertainment Group, home of Galaxy International Convention Center, and Sands China, which operates The Venetian Arena, are best placed to achieve this growth because they are able to control their own event calendars.
The analysts note that when renowned Cantopop artist Jacky Cheung performed nine shows at the 15,000-seat Galaxy Arena in June and July this year, Galaxy achieved a raft of post-pandemic highs including GGR market share of 20.5%, operating EBITDA of HK$3.57 billion and EBITDA margin of 29.6%.
This is, they explained, because the event-hosting casino operator can get up to 50% of the best seats in the house from the event promoter which it can then offer to its best premium players “free of charge” in some cases.
“The other five casino operators might still be able to get tickets to the remaining best seats, but they will have to split amongst them,” Citi said. “This means that the hosting casino operator will likely have a disproportionate amount of player checked-in cash commitments for gaming purpose over its peers, which will translate into significant market share gain.”
The investment bank pointed out that hosting major events kills many birds with a single stone – allowing operators to check a box given their commitment to invest MOP$130.6 billion (US%16.4 billion) into non-gaming attractions while also appealing to a more affluent segment of the customer base.
“Consumers visiting Macau tend to be the more affluent ones who are willing to pay a premium for total experience,” the analysts wrote. “Although ticket prices in Macau are on average much higher versus that in China, most of the concerts and events in Macau are sold-out.
“For Korean artists, it looks like Macau has become the best place to stay connected with the Chinese fans (given the de-facto Hallyu ban). Since re-opening, the number of Korean artist concerts and fan meetings that took place in Macau has increased exponentially, from nine in 2023 to 33 in 2024 and 59 year-to-date.”
