JP Morgan has presented a positive outlook for Macau’s gaming revenue by the end of the year, estimating that the gross gaming revenue (GGR) in December will range from MOP17.5 billion ($2.1 billion) to MOP18 billion ($2.2 billion). This projection indicates a return to 80 percent of the pre-pandemic level.
Simultaneously, Macau’s mass GGR for 4Q23 is forecasted to increase by 10 percent quarter-to-quarter, surpassing the historical average of a 5 to 6 percent quarter-to-quarter seasonal increase. The mass GGR is expected to exceed the pre-Covid level, driving EBITDA back to over 85 percent of the pre-pandemic level.
JP Morgan’s latest investment memo noted that Macau’s GGR in November was MOP16 billion ($2 billion), with an average daily GGR of MOP535 million ($66.3 million), equivalent to 70 percent of the pre-Covid period, aligning with market expectations.
Following the November GGR data release, Goldman Sachs reported concerns about rising operating costs and a sputtering EBITDA recovery in the industry. The forecast for the industry’s EBITDA assumptions is contingent on gaming and non-gaming revenue growth.
As of the 3Q23 earnings season, gaming operators in Macau have already recovered to 80 percent of pre-pandemic levels. However, their stock prices on the Hong Kong Stock Exchange experienced a significant fall over the past few months.
UBS, another investment bank, commented on the Macau gaming industry, pointing out that the average price for hotel guest rooms in Macau for late December rose to HKD3,800 ($487) per night from HKD2,600 ($333) per night in November. This increase is primarily powered by seasonality and non-gaming events.
The six casino operators in Macau are assembling an unprecedented line-up of events for 4Q23, including those organized by the government, such as the iconic annual event “Light Up Macau.”
Many analysts believe that non-gaming events could provide an additional boost to gaming and non-gaming revenues in the city.
For the eleven months leading up to November 30th, Macau’s casino GGR reached $20.4 billion, indicating a 325 percent surge compared to the same period the previous year. Meanwhile, Macau received 22,685,476 visitors in the first ten months of 2023, reflecting a significant 358.8 percent growth in visitor arrivals compared to the previous year.
