Macau mass gaming to reach 113% of 2019 levels, analysts say

UBS cited stronger-than-expected demand.

Macau.- Analysts at UBS have updated their outlook for Macau’s gaming industry, revising 2024 mass revenue estimates from 110 per cent to 113 per cent of 2019 levels. In an investment memo, UBS attributed the upward revision to robust demand. However, it lowered its estimate for non-gaming revenue to 114 per cent of the 2019 level.

UBS has maintained its 2024 sector EBITDA estimate at 89 per cent of 2019 levels, with operational expenses expected to remain at 105 per cent of 2019 levels. The memo indicated that the momentum in mass GGR continued in the second quarter of 2024, following better-than-anticipated results in the first quarter.

It highlighted the expansion of the Individual Visit Scheme (IVS) to ten additional cities, including Qingdao, Xi’an, and Taiyuan, covering roughly 45 million residents, from March. UBS noted that this expansion increased the IVS catchment area by 10 per cent in gross domestic product (GDP) and 13 per cent in population terms, leading to higher visitor numbers as flight capacity between new IVS cities and Macau and Hong Kong rose 31 per cent quarter-on-quarter in the second quarter.

See also: Macau GDP rises 25.7% in Q1

Stabilising cost inflation and competitive pressures are anticipated to moderate margin pressure in 2024, further supporting growth. Cumulatively, Macau’s GGR for the first five months of 2024 was MOP$96.06bn (US$11.9bn), up 47.9 per cent year-on-year.

Macau’s GGR for May was MOP20.19bn (US$2.51bn). It was the city’s best monthly performance since January 2023, when borders reopened after the Covid-19 pandemic.