While Australia’s casino operators have suffered from lower spending by Asian high-roller gamblers, analysts see potential VIP recovery in the 2020 financial year.
In a report from Sydney Morning Herald, analysts from Macquarie Wealth Management said while they have an overall bearish view on the VIP market, they have observed a “U-turn” in mainland Chinese sentiment “which we see flowing into VIP confidence and driving an uptick in volumes.”
“We now include a VIP recovery in the financial year 2020. While we remain cautious on [19H2] VIP volumes, with our view that Macau VIP bottoms in the June 2019 quarter, we are optimistic and now forecast a recovery,” said the analysts.
Earlier this year, Australian casino operator Crown Resorts saw its VIP revenue decline by 12.2 percent in the first half of the 2019 financial year, reflecting what Crown describes as “mixed trading conditions.”
During an earnings call, Crown’s chief financial officer Ken Barton blamed the decline on lower spending, especially from VIP Chinese tourists.
The Star Entertainment Group also saw its VIP turnover fall in the half year, down 33 percent year-on-year.
However, despite the company recently reporting a VIP downturn, Star Entertainment CEO Matt Bekier during a March conference said he forecasts an upwards trend in Chinese VIP tourist arrivals and spending over the next decade.
Macquarie Wealth Management was also optimistic about The Star’s future, saying that it “continues to look attractive” with resilient domestic growth.
Crown is building a VIP-only casino in Sydney’s Barangaroo, which is set to be completed in 2021.