How China’s Weakening Economy Could Hurt Macao Casinos
The Macao region relies heavily on the Chinese mainland, as it garners the huge majority (about 67%) of its visitors and VIP gamers from China and its neighboring countries.
As of January 3, 2016, the Macao casino industry valuation stands at 12.6x. This valuation is lower than the industry average valuation of 12.05x since February 2008.
Macao casinos’ $28 billion investment in integrated resorts is set to change the city’s gaming business.
As VIP business continues to remain sluggish, casinos are increasingly turning their attention towards the mass market.
Sands Parisian opened its resort in September 2016 and has been leading the mass market recovery ever since.
The annual inflation in Macao fell to 1.5% in November 2016.
For September 2016 through November 2016, the unemployment rate stood at 1.9%.
For November 2016, visitor arrivals remained unchanged as compared to November 2015 and fell 3.4% month-over-month to 2.6 million visitors.
Macao casino revenues have reported a fifth consecutive month of growth. December revenues rose 8% YoY to ~$2.5 billion.
After rising for four consecutive months from August to November, Macao casino stocks posted losses in December.
Recently, the US travel industry has been impacted by a variety of events. One thing that beats these issues is Donald Trump.
On September 12, 2016, the Macao casino industry valuation stood at 12.6x. This is lower than the industry average valuation of ~12.1x since February 2008.
Macao casinos’ $28-billion investment in integrated resorts will change the city’s gaming. Capacity additions should increase the number of slot tables too.
The Macao region relies heavily on the Chinese mainland, garnering a majority (~67%) of its visitors and VIP gamers from China and neighboring countries.
As VIP business remains sluggish, casinos are increasingly turning their attention to woo mass market.
Wynn Resorts opened its $4.1 billion Wynn Palace on August 22, 2016, and this may have directly contributed to Macao’s casino industry recovery in August.
Macao’s unemployment rate reached 7% in 2000. Growth in tourism and gaming helped curb high rates, bringing the average down to ~3.9% from 1996 to May 2016.
The annual inflation in Macao fell to ~2.1% in July 2016. Inflation has, in fact, been on a declining trend in the region since February 2016.
After 26 consecutive months of declining revenues, Macao gaming revenues have finally shown a small spurt of growth.
According to the Statistics and Census Service of the Macao Government, in July 2016, visitor arrivals improved 6% YoY and rose 19% MoM.