Despite seeing 5 consecutive monthly winnings last year, Macau still reported a drop in annual revenue for the third time. This resulted in stock prices being affected and analysts giving out their own versions of the market scenario.
However, Macau hopes to cash in on the tourism and leisure tag, which has already sprouted signs of growth last year. The gaming capital hopes to leverage this model in bringing back its revenue numbers to what they looked like during the days of VIP betting. Late 2016, fortunately, has allowed Macau to get closer to that goal.
Macau’s GGR or Gross Gaming Revenue in December grew to 19.8 million Patacas or US$2.48 billion. That’s an 8% increase from the previous year’s numbers and a 5.5% increase from the previous month. However, for the entire year, the GGR dropped by 3.3% to 223 billion Patacas or $27.9 billion. 4th quarter numbers indicated a 10% increase from the 3rd quarter, as well as on a year on year basis.
December also saw the Macau government implement a rule limiting UnionPay withdrawals to HK$5,000 per transaction. Fortunately, this did not have an effect on the revenue. However, casino operator share prices dropped by 13% due to the ruling.
But, the general consensus is that Macau is on the road to recovery. Grant Govertsen, Union Gaming Head of Asia Equity, cites a 21% growth in December, relative to June, as a sign of good times. He adds that the growth has been sequential, with the exception of October, which is a holiday month.
Grant also mentioned that the GGR growth rates actually overtook the supply growth rates for the exact same period. Hotel rooms showed an increase of 15%, while table games and slot machines showed an increase of 6% and 8% respectively. According to the Union Gaming Head, a few more humble increases in 2017 indicate a better outcome for next year.
Morgan Stanley agrees with the consensus, predicting a 10% growth in casino revenue. Similarly, the Buckingham Research Group predicts a 6% to 8% growth in GGR for 2017.