Macau gaming operators’ EBITDA to increase 15% in 2022, analysts say

A reduction in operating costs market-wide and rising hotel room capacity will see Macau gaming operators’ property EBITDA increase to over 2019 levels in 2022.

Macau.- Morgan Stanley estimates Macau’s gaming operators could see property EBITDA increase 15 per cent in 2022, when compared to 2019 levels.

Rising hotel room capacity, growing demand and reduced costs are expected to benefit casino operators, leading to EBITDA of US$11bn in 2022.

Analysts noted that the openings of SJM’s Grand Lisboa Palace and Galaxy Entertainment Group’s Galaxy Macau Phase 3 will increase the number of hotel rooms in Cotai by 13 per cent.

With The Londoner Macao, focusing on quality over quantity, ultra-high-end hotel rooms will be up 59 per cent.

A circa 4 per cent reduction in operating costs market-wide among the six Macau licensees will also help increase EBITDA.

Morgan Stanley stated: “Macau will look and feel different in 2022 when compared to the pre-Covid world.”

Macau’s gaming operators could benefit from “onshoring”

According to Morgan Stanley “20 per cent of all Asia (ex-Macau) mass revenue could come back to Macau by 2022” thanks to “onshoring” of Chinese consumer play that might previously have gone to neighbouring Asia Pacific destinations.

Asia-Pacific casino gross gaming revenue (GGR) for mass-market table games and slots outside Macau was about US$10.3bn in 2019. With travel restrictions due to the Covid-19 pandemic, analysts expect part of this business to come to Macau.