CreditSights, a division of the Fitch Group, forecasts that Macau’s gaming industry may experience continued growth in 2024, despite flattening trends.
In its latest Macau gaming outlook, CreditSights notes that Macau has shown a robust post-pandemic recovery since reopening in January 2023. ‘We expect to see additional growth in the region for the remainder of 2024 but anticipate flattening trends as the recovery matures.’
For 2024, the research firm expects Macau’s gross gaming revenue (GGR) to recover to 75-80 percent of 2019 levels, reaching approximately $28 billion at the midpoint, a 24 percent year-over-year increase.
‘While GGR improvements relative to 2019 have moderated, we anticipate incremental growth driven by modest increases in visitations and steady spend per visitor,’ stated CreditSights.
In the first half of 2024, Macau’s casino GGR reached MOP113.8 billion ($14.20 billion), up 41.9 percent from the previous year.
Among the six gaming operators, CreditSights views MGM China as ‘the biggest winner coming out of COVID’. ‘The company has benefited from a significant increase in market share compared to 2019, partly due to a higher table game allotment from the recent concession renewal.’ Margins have also surpassed pre-pandemic levels, contributing to substantial year-over-year EBITDA growth.
Meanwhile, the research firm has lowered its forecasts for Wynn Macau, noting that the yield gap on Wynn Macau bonds relative to MGM China has narrowed compared to pre-pandemic levels, despite Wynn Macau having weaker market share and a longer path to leverage recovery.
Studio City gains momentum after Phase 2 opening
In its latest observation, CreditSights notes that the recovery at Melco’s Studio City property has gained momentum over the past several quarters, following the rollout of Studio City Phase 2. This momentum is expected to continue through the remainder of 2024, supporting stronger EBITDA growth compared to other Melco Resorts Finance properties.
Conversely, the Melco Resorts Finance properties have experienced one of the slower recoveries in Macau, attributed to lower market share and margins.
While CreditSights anticipates incremental growth at the Melco Resorts Finance properties for the rest of 2024, it believes that a more prolonged EBITDA/leverage recovery will continue to impact yields relative to other operators in Macau.
