Higher VIP hold rate developed into ADR recovering week-on-week in Macau during last week’s operations.
Macau.- Brokerage Bernstein reported that gross gaming revenue (GRR) in Macau increased slightly last week, ADR recovering marginally when compared to the previous week as there was a higher rate of VIP.
During the period of September 1-17, gross gaming revenue reached US$1.5 billion, as AGBrief reported. Month-to-date ADR is also slightly up from the expectations at US$83 million, the previous report from September 1-10 at US$82 million. As Bernstein said, if the trend continues, September GGR could reach between US$2.4 billion and US$2.5 billion, an increase of 10 to 12 percent when compared to last year operations.
The brokerage also reported that Melco is likely to outperform, as the opening of Morpheus will boost the activity at City of Dreams Macau in 2018, and it will bring premium gaming customers, AGBrief reported. “This addition to CoD will allow the property to remain competitive considering the newer property openings targeting a similar client base (i.e., MGM Cotai and Wynn Palace),” said Bernstein.
Last week, the analysts from the brokerage estimated that gaming gross revenue growth in Macau could decelerate during the fourth quarter of the year due to a slow VIP demand. Macau has been experiencing a strong recovery period from two years of decline that also coincided with China’s crackdown on corruption.
Resurgence in spending by VIP gamblers and a rise in mass market tourism in Macau helped gross gaming revenue to grow 22 percent year-on-year during the second quarter of the year eded June 30. Despite a positive lookout in the long run and expectations of mass market segment to drive growth, the brokerage said that share price for most of the six Macau casino stocks under its coverage won’t likely see a significant appreciation. GGR growth is expected to decelerate to 20 percent during the third quarter period and 8 percent during the last quarter because of a slowing VIP demand. For the overall 2017 results, Bernstein expects GGR to grow over 15 percent.