Leading up to the Chinese New Year period, Macau’s casinos have recorded an increase in traffic, with HSBC noting some $1.6 billion in GGR in the first three weeks of January.
According to the research team from HSBC, the first 21 days of January yielded MOP13 billion ($1.6 billion) in gross gaming revenue (GGR), implying an average daily run rate of MOP629 million ($78.1 million) per day over the past week, 5 percent higher versus the week before.
Analysts Charlene Liu, Jessie Lu, and Lauren Cai note that the improvement was driven by both traffic and a higher VIP win rate of 2.8-3 percent last week, while the VIP win rate was about 2.7-2.8 percent in the previous week.
By segment, HSBC indicates that VIP volume was up by 1 percent month-to-month, versus flat the week before, while mass GGR was up 4-5 percent month-to-month, compared to the 3 percent rise month-to-month the week before.
Among the six gaming operators in Macau, Sands China, and MGM are gaining mass market share compared with December, based on industry feedback. Assuming the rest of January generates an average daily run-rate of MOP550-600 million per day, the full-month GGR should come in at MOP18.5 billion ($2.3 billion) to MOP19 billion ($2.36 billion) in January, tracking 74-76 percent of the January 2019 level, versus 75 percent in 4Q23.
Visitor arrivals forecast
The investment memo notes that the Macau government expects 120k visitors per day during the upcoming Chinese New Year (CNY) holiday, while year-to-date visitation tracks at 70k-80k per day.
The 120k daily visitor arrival target is higher than the 116k per day level recorded in the 2023 October Golden Week.
‘The expectation is not high in our view given it only translates into 70 percent recovery vs. the 2019 CNY level, whereas October and November 2023 already saw over 85 percent recovery.’
For 2024, Macau sets an annual visitor arrival target of 33 million, 84 percent of 2019 levels (39.4 million).
2024’s CNY Golden Week falls between February 10th and 17th, meaning Mainland Chinese will start going home for family gatherings as early as January 26th.
In another weekly investment memo from UBS, the analysts note that the average hotel price for the upcoming CNY period remains solid at HK$9,000 ($1,150) per night, on par with October Golden Week 2023.
