Macao Business: June could mark inflection point in gaming sector recovery – Analysts

https://www.macaubusiness.com/june-could-mark-inflection-point-in-gaming-sector-recovery-analysts/

2 July 2023

June could mark inflection point in gaming sector recovery – Analysts

By Nelson Moura

Macao Business

Gaming analysts are divided over the significance of reported June gaming results for the recovery of the SAR casino sector in the second half of the year.

The local casino sector generated a total of MOP15.2 billion (US$1.9 billion) in gross gaming revenue in June, bringing this year’s first-half tally to MOP80.1 billion, an increase of 205 per cent compared to the same period last year, according to data from the Gaming Inspection and Coordination Bureau (DICJ).

Despite this deceleration, for Alidad Tash, managing director at 2nt8 Limited, the June results are “promising” considering that this month tends to be “traditionally slow” in terms of visitation and gaming results.

“The GGR for the second half of the year is expected to gradually increase as transportation gets back to its pre-pandemic levels. The non-gaming efforts by the gaming companies (e.g., concerts) shifts into a higher gear, and the newly added hotel product reaches a higher occupancy,” Tash stated to MNA.

With the recovery, the gaming expert expects 2023 to reach 60 percent of 2019 levels, prior to the pandemic.

The first-half total GGR already accounts for 61 per cent of the government’s full-year forecast of MOP130 billion.

In its own assessment, Deutsche Bank analyst, Carlo Santarelli, considered that although GGR has decreased month-to-to-month, average daily revenue improved 1.0 per cent relative to May.

“The +1.0 per cent sequential improvement per day implies a healthy acceleration in the seasonal sequential trend, as the average sequential uptick in June, relative to May, over the 2016 to 2019 period, was -8.5 per cent,” a Deutsche Bank dispatch states.

On the other hand, Ben Lee, managing partner of IGamiX Management Consulting underlined that June is the first month since February to not record a month-on-month growth, raising the possibility that the city gaming sector may have “plateaued” in terms of its “mass driven recovery”.

The June figure signaled a 2.3 per cent decrease from May, which saw the highest post-pandemic monthly result.

“The Macao Government Tourism Office (MGTO) promotions in terms of free accommodation and travel have also just ended which we believe contributed significantly to the rapid growth we have seen. We also saw the return of some junket activity, more than would have been expected given recent events,” Lee pointed out.

Local tourism authorities have been advancing with several initiatives to attract a different pool of tourist visitors to the SAR, including flight ticket discounts in collaboration with various airlines.

The city logged a daily average of over 70,000 tourists in June, according to Maria Helena de Senna Fernandes, the director of the Macau Government Tourism Office, but with only less than 6 per cent of arrivals coming from overseas.

According to the survey conducted by Macau Hotel Association, the average hotel room rate for the first five months of 2023 reached MOP1,235.3, a year-on-year increase of 49.5 per cent, with the average hotel occupancy rate for the same period skyrocketing to 80.6 per cent.