Macau is in a better position to recover from the Coronavirus crisis than its main rival, Las Vegas, due to VIP player, say analysts.
Macau.- Macau is in a better position to recover from the Coronavirus crisis than its main rival, Las Vegas, according to analysts.
The main reasons are that the city has substantial financial reserves and can rely on VIP gamblers to drive growth.
“Las Vegas gambling companies usually earn less than 40 per cent of their revenues through gambling,” David Green, founder of Macau Newpage Consulting, a specialist on regulations in the sector, said.
In Macau, he noted, gambling accounts for around 90 per cent of revenues of concession holders.
In contrast, in Las Vegas, it will be “the closure or restriction of shows, entertainment, restaurants and bars and commerce that will cause more suffering,” Green said. “They are two different markets.”
While Macau is depending on gambling and tourism from mainland China, it could mitigate losses by attracting “few, but good gamblers”.
Grant Bowie, CEO of MGM China, has similar thoughts and said the focus would be on “particular group of customers” -VIPs- at a time when cross-border travel is still very limited.
According to Green, Macau has yet another great advantage: “it has huge financial reserves created from years of surplus government budgets.”