Macau gaming brands including Wynn and Melco are well positioned for the long-term in China’s growing premium market, says Bernstein.
In its latest report titled: “China Consumer: Premium is the new mainstream”, the brokerage points to a growing premium consumer class in China – an estimated 63 million people who are expected to drive sustained value growth in premium consumer goods.
This growing class of premium consumers is expected to grow at 7.4 percent CAGR through 2026.
“The long-term winners in Premium will be the companies who own and nurture intrinsically differentiated brands, in our view. These winning brands will need to continually deliver product benefits which justify their premium pricing and set them above competitors. Wuliangye, Moutai, Brilliance, Mercedes, JLR, LVMH, Kering, Hermès, Richemont, Wynn, and Melco have strong, intrinsically differentiated brands and hence are well positioned to sustain their existing competitive advantages over time,” noted Bernstein.
In a report earlier this month, Bernstein stated that quality of hotel rooms and non-gaming offerings are among the most important factors for Chinese gamblers when choosing a property to stay in Macau.
The brokerage said that the “premiumization” of the mass player will be a driver of growth in this market, with visitors staying longer and spending more.
“We believe that in the future, as the Chinese economy continues to grow, and Chinese consumers enter higher income brackets, more and more Chinese people will be able to visit Macau, enhancing both penetration rates in China and per capita spending on gaming,” said Bernstein.