Macau GGR to reach US$23.6bn in 2021, analysts say

Estimates suggest a growth in visitation could drive better GGR but only up to 65 per cent of that seen in 2019.

Macau.- Forecasting financial results for 2021 amid the still uncertain scenario caused by the Covid-19 pandemic is a difficult endeavour. However, according to analysts from Morgan Stanley, gross gaming revenue for Macau could reach MOP189bn (US$23.6bn) this, about 65 per cent of the GGR reported in 2019.

The analysts had previously forecast a more conservative estimate of MOP130bn. GGR reached just MOP60.4bn in 2020.

In its Macau outlook report for the year, the brokerage takes into account figures for the last quarter of 2020, which saw GGR down by 70 per cent year-on-year, and also daily visitor arrivals in the city, which remain at levels between 30,000 to 40,000.

It said: “We expect VIP and mass revenue to be 40 per cent and 80 per cent, respectively, of 2019 levels.”

Visitation is one of the key indicators. One positive sign that could drive growth is that more than 2,500 new integrated resorts rooms will be added in 2021.

SJM’s Grand Lisboa Palace is expected to fully open in the third quarter of this year with 1,900 new rooms. Galaxy’s planned opening of its Phase 3 will add 800 luxury rooms in the second half of the year, and Sands’ The Londoner will add 600 suites.

The analysts add: “Chinese overnight visitation follows hotel rooms availability. We believe additional rooms in Macau will drive room availability and thus higher premium mass revenue for the industry”.

Meanwhile, bringing overseas gaming from Singapore, Cambodia and the Philippines back to Macau could also drive growth.

The report says: “One-third of Asian gaming revenue comes from outside Macau, part of which is contributed by Chinese consumers and could come back to Macau with recently unveiled criminal law making it more difficult for overseas countries to solicit Chinese consumers.”