Morgan Stanley cuts Macau GGR forecasts

The declining trend in Macau’s gross gambling revenue is unlikely to stop before October, according to analysts at Morgan Stanley, who have cut their estimates for the year. 

The firm now expects GGR to drop by 35 percent this year, down from its earlier estimate for a decrease of 16 percent. It sees a 40 percent rebound next year, compared with its earlier forecast for a 20 percent gain. 

“This drives down our 2020 and 2021 EBITDA estimates by -37 percent and -18 percent, respectively, due to fixed costs and negative operating leverage,” it said in a note. 

“While we expect recovery to be slow, we anticipate VIP to turn around faster and Peninsula to benefit from land based visitation.”

Although casinos in Macau have reopened, strict border controls and the ongoing ban on Chinese travel groups and the individual visit scheme mean that visitation is minimal.