Macau will continue to be a “highly profitable” market for gaming operators.Capital expenditures over the next decade are not expected to be as high as in the past, but the local mass market will gradually recover. Expected. Stanley Asia says:
He spoke today (Wednesday) at a conference session on Asian gaming destinations on the first day of G2E Asia 2022 Special Edition: Singapore. This is his first three-day gaming industry trade fair in a Southeast Asian country.
The Macau government will launch a new public tender in late July for a 10-year gaming concession in the city beginning early 2023, as the current six gaming concessions and sub-concessions expire by the end of this year. Did. The bidding process for up to six concessions will continue until September 14th, with potential bidders required to submit proposals describing how they will attract overseas gamblers and tourists to Macau, non-gaming investments and more.
“There is no other competition. [and] From my point of view, only all 6 players are bidding. So they don’t have to chase each other. “The cost going forward will be much lower.”
“One of the biggest costs Macau has had in the last 20 years is adding capacity, and I don’t think we can use land other than Galaxy. [Entertainment Group],” he continued. “Just keep improving the existing equipment. [and] We keep adding non-game amenities. It saves you a lot of money. ”
Despite the expected lower return on investment for future Macau gaming concessionaires, he added:
In the first seven months of 2022, Macau’s gaming revenue was just MOP26.67 billion (USD3.33 billion), down 53.6 year-on-year due to fluctuations due to the development of Covid-19 and a slowdown in mainland China’s economy. % decreased. government data show. The tally translated to only 15.3% of pre-Covid volumes.
“Not peaked yet”
On the outlook for the Macau market today, Morgan Stanley analysts are optimistic and confident about Macau’s “mass market resilience”, including premium mass, once Covid-19 travel restrictions are lifted. said that
According to data collected, Macau penetration rate for visitors from nearby China’s Guangdong province was 15.6% in 2019 before the coronavirus outbreak, but visitors from other provinces and cities in mainland China penetration rate reached just 2%. by intermediary.
“This is why the market remains excited about Macau. Demand is still there.” [hotel] It’s about getting rid of rooms and of course travel restrictions,” Choudhary said. “At some point, we also need [nearby] More rooms to drive in Hengqin Island [an] higher growth. Therefore, we believe that Macau has not yet reached its peak. ”
During a question-and-answer session at the Legislative Assembly earlier this month, Macau Chief Executive Officer Ho Iat Seng said the number of mainland Chinese gamblers in Macau was at peak levels for the industry during the 2013-2014 period. Said it was impossible to go back. This “will have a serious and negative impact on the country,” he said at the time, emphasizing the importance of Macau attracting overseas gamblers and travelers.
According to Morgan Stanley, Macau typically accounted for 60-70% of gaming revenue across Asia-Pacific before the Covid-19 pandemic, followed by Singapore, Australia and the Philippines.
Choudhary added today that he believes the Philippines will soon overtake Singapore in terms of total gaming revenue, despite the expansion of integrated resorts in Singapore.
Following the pandemic and demise of Macau’s junket operators over the arrests of junket bosses Alvin Chau Chok Wa and Lebo Chan Wen Lin, Mr Choudhary announced today that VIP gaming in Asia Earnings have shrunk more than in the past two years, he said. ASEAN (Association of Southeast Asian Nations) countries account for a larger share of the pie.
For example, Macau remained the largest contributor to Asian VIP gaming revenue in the first half of 2022, but only accounted for 35% of the total, compared to more than 70% in the past. The Philippines accounted for his 25% of his January-June Asian VIP income in 2022, followed by Singapore (24%), Malaysia (10%) and Cambodia (4%).