Macau’s mass market gaming revenues may have recovered to between 60% and 70% of pre-COVID levels during the Chinese New Year “Golden Week” holiday period, according to on-the-ground checks by investment bank JP Morgan.
Analyst DS Kim wrote in an overnight note that his team met with multiple operators during a visit to the SAR in Golden Week, with all of those operators “positively surprised” by the level of demand across all segments since Macau dropped almost all remaining border restrictions on 8 January.
He also noted “long queues for many retail/F&B outlets and lively gaming floors with high minimum bets – HK$500 to HK2,000 (US$64 to US$255) for main floor and HK$3,000 to HK5,000 (US$383 to US$638) for premium mass lounges.
“We feel very good about the pace and magnitude of recovery here,” he said.
“Our sense is that [Chinese New Year] mass gaming revenues may have recovered to 60% to 70% of 2019 Chinese New Year, which would be nearly double what visitation figures indicated and double what we have in our models.
“Note, also, that 2019 Chinese New Year generated one of the (if not THE) best mass gaming revenues in the history of Macau, so 60% to 70% recovery against this figure, if true, would be very telling and well above what the street is expecting.”
JP Morgan also expanded on comments made by Las Vegas Sands executives during last week’s 4Q22 earnings call in which they noted that spend was comfortably outperforming raw visitation numbers at the company’s Macau properties.
In Monday’s note, Kim observed that length of stay is currently much longer than pre-COVID, that quality of visitation is higher as ‘core’ patrons return faster, and visitor mix is different given package tours – the participants of which are typically not prolific gamblers – are yet to properly resume.
“Put simply, the pace of recovery for casino patrons was faster than that of Macau’s headline visitation (thanks to better mix), and gaming revenues recovered even faster than casino patron figures (thanks to better spending per patron),” Kim wrote.
