Macau’s gambling revenue in December marked the fifth straight month of slow recovery during its current 3-year slump. Operators are hopeful following the last five months’ favorable performance, despite the year’s first seven months showing significant losses. Sunday’s announcement of both December’s and 2016’s overall revenue remained on downward trend with a 3.3%, or $28 billion, slip for 2016. However, the decline is slowing and a sustained recovery is forecasted to continue.
Non-gaming revenue topped out at 9.39% by the end of 2015. The city’s predicted targets for 2020 were met by the beginning of last year according to the Statistics and Census Service’s and trends continue to support a favorable trajectory. Tourism overall is flowing, with an increase in numbers marked by government statistics as well as industry reports.
Tourism data was punctuated by an overall 14% more passengers visiting Macau via aircraft, with a 2% increase in flights making their way to Asia’s largest gaming destination over the last year. Analyst and managing game director of Union Gaming, Grant Grovertsen contributed his thoughts today on a visible recovery, ”We’ve seen gross gaming revenue per day increase every month, sequentially, starting in June. So July was a little bit better than June, August was better and so forth.” This comes following another report on the subject from Macau TDM, Macau’s most senior TV and Radio network.
Several new resorts opened their doors in 2016, which no doubt contributed to the market’s favorable upturn. Openings included The Parisian Macao, funded by the Las Vegas Sands Corporation which features a complex of approximately 3,000 hotel rooms, 170 shops and 556,000 square feet of meeting space. A 1,200 seat theater is also featured on the grounds in addition to a 525-foot tall, half-scale replica of the Eiffel Tower.
Wynn Palace Cotai also saw its doors open as the first Cotai Strip-located resort and third overall skyscraper from Wynn in Macau. The resort property features 1,700 hotel rooms, an 8-acre performance lake, gondolas, meeting facilities, spa, salon, and retail and dining venues. With 29 floors that span 450,000 square meters, the project was lauded by Steve Wynn as “The most aggressive, ambitious and lovely project” carried out by the corporation to date.
These opening will pave the way for the MGM Cotai, a $3 billion complex expected to open its doors in 2017 and SJM’s Grand Lisboa Palace, a $3.9 billion resort slated for 2018.
Many analysts believe the bottom of Macau’s economy has been seen and left behind already, with contributors from Fitch Ratings noting, “Macau gaming, now firmly at the bottom of the cycle, has better long-term prospects given investments in new supply, improvements in mass market indicators and under-penetration of gaming throughout the rest of Asia,” according to Reuters reports.
This outlook is good news amid China’s extensive crackdown on corruption in Macau, which has let other markets in the region bolster their VIP offerings in the gaming sector and draw tourists to destinations outside Chinese jurisdiction. Saipan is currently enjoying a tremendous showing with almost eight time chip turnover per table at casinos. The Okada Manila in the Philippines was a third addition to the integrated resorts located in Cambodia and South Korea. Additionally, the outlook for Japan has heads turned in the case of forthcoming regulatory bills as the first legalized casino gambling institutions are seen just on the horizon.
Despite a strong showing from these up and coming rivals, Macau remains the Asian powerhouse of gaming and thanks to favorable forecasts, it should remain there at the top for the foreseeable future.
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