Macau gaming revenue recovery tied to China’s consumer confidence, Thailand no threat – Analyst

Macau’s gaming sector is bracing for another year of subdued growth, but signs are emerging that consumer confidence and shifting industry trends could lay the foundation for a rebound as early as 2026, according to CLSA equity analyst Jeffrey Kiang.

While regional gaming markets such as Thailand and the Philippines are gaining momentum, CLSA does not view them as direct threats to Macau’s core customer base. “Thailand looks to be a different gaming market from Macau,” Kiang said, highlighting the distinct visitor profiles and trip lengths.

“Length of stay is over seven days in Thailand versus less than two nights in Macau. Visitor mix is also different—about 25 percent from Mainland China and Hong Kong for Thailand, compared to around 90 percent for Macau.”

At the heart of CLSA’s outlook is the belief that Chinese consumer sentiment will be a decisive driver of gross gaming revenue (GGR) over the coming years. “Anything that drives consumers’ discretionary spending will work,” Kiang said.

Among the indicators he watches closely is the Hang Seng Index, which has historically tracked closely with gaming activity. “We have looked at the year-on-year change between Hang Seng Index and GGR per visitation. They moved together from January 2016 to December 2019,” he said. “If the stock market can keep its momentum, we believe that trend will converge again soon.”

CLSA’s broader vision for the sector over the next five years includes both continuity and transformation. “The integrated resort model and mass-focused gaming business should continue for land-based gaming,” Kiang said, adding that emerging themes could redefine Macau’s appeal.

One such area is wellness tourism, which was a hot topic during this year’s Asian Integrated Resort Summit. “There are growing focuses on well-being, and we’re seeing some of that already within Macau’s IRs,” Kiang noted.

He also pointed to IP collaborations and Gen Z-focused experiences as potential growth avenues. “Anything that drives mind share and consumer experience would help. These hopefully would mean higher spending for operators, but offerings will decide how the pie is divided.”

GGR outlook revised down, but rebound expected in 2026

Despite these longer-term opportunities, CLSA recently downgraded its 2025 GGR forecast to MOP230.8 billion ($28.8 million), following a tepid start to the year. “1Q25 Macau’s GGR marginally grew 0.6 percent year-on-year, which was weaker than we expected,” Kiang said. “Until May Golden Week, the news flow hasn’t been favorable.”

Yet day-to-day performance has shown resilience, with GGR averaging MOP624 million ($77.5 million) per day since January 2024. “The sector’s GGR should be quite steady. The key question is when the breakthrough will come,” Kiang noted.

CLSA sees that inflection point aligning with a recovery in China’s property market, likely in the second half of 2025. “Our property research team’s base case is the market should bottom in 2H25,” Kiang said. “That’s where our 2026 GGR growth case is predicated.”

Visitor mix and spending trends

Kiang believes that declining spending per visitor is tied to a normalization in the type of tourists returning to Macau. “It’s always those who gamble in casinos that return first during a reopening,” he said. “So GGR per visitor started from a high base in 2023.” With more leisure travelers now arriving and non-gaming attractions expanding, average spending has tapered off, especially among the grind/base mass segment.

China’s sluggish consumer confidence, still hovering near historic lows, remains a major constraint. “It ticked up from the trough level of 85.7 in September 2024 to 87.5 in March 2025, but that’s still very low,” Kiang said. “This impacts the grind mass more than the premium mass.”

CLSA also expects sector EBITDA to fall 6 percent year-on-year in Q1 2025. In this environment, cost discipline and customer engagement are critical. “The key is ensuring every penny spent translates into incremental revenue,” Kiang said. “Operators must focus on maximizing mind share—this will ultimately translate into higher revenue and EBITDA market share.”

Non-gaming and hotel constraints

Non-gaming activities now make up 15 percent of sector EBITDA, serving as strategic tools to drive traffic. “Non-gaming can drive foot traffic into properties and casinos,” said Kiang. “Targeting consumers with deep wallets can also be accretive to GGR.”

Hotel capacity continues to be a bottleneck. With only 47,000 rooms in Macau and roughly 90 percent occupancy, the sector faces limits on accommodating overnight visitors. “Room occupancy represents whether players—especially premium mass—are showing up in Macau,” Kiang said. “With 15 to 18 million overnight visitors a year, supply remains tight.”

As CLSA sees it, Macau’s future lies not only in gaming but in evolving consumer sentiment, smarter operator strategies, and broader appeal beyond gambling. If China’s economic pulse revives and visitor engagement deepens, the territory may yet find its next growth cycle—potentially by 2026.