Macau casino operators are struggling as more mainland Chinese tourists head to rivals in Cambodia, where travel costs are lower.
Cambodia.- Whilst Macau casino operators are struggling, mainland Chinese tourists head to rivals in Cambodia, where travel costs are lower. Visitor arrivals to Cambodia rose 2 percent on the year for the January-May period. According to the country’s Ministry of Tourism, most tourists come from Vietnam, China and South Korea. Visitors from China increased 12 percent. In the meantime, Macau’s mainland tourism dropped 0.4 percent for the first half, despite a 0.1 percent uptick in overall arrivals.
NagaCorp, operator of NagaWorld, Phnom Penh’s only casino, logged € 110.9 million in net profit for the January-June half. This is a 24 percent year-over-year rise. On the other hand, Macau’s casino operators faced declines in their profits. Sands China’s bottom line for the half was 25 percent lower than a year earlier at € 487.9 million. JM Holdings’ profit plunged 39 percent for the half to € 124.2 million.
Lau Siu Cheung of Prudential Brokerage considers that Macau or Cambodia, casinos’ offerings are essentially the same. Now, according to Timothy McNally, NagaCorp Chairman, Cambodia’s advantage is in its low costs, which includes food and lodging.
Tables for high-rolling VIPs are becoming less common in Macau, but they catch on at NagaCorp. Cambodia’s lower baseline costs apparently make visitors more likely to spend freely on gambling. Maybe Chinese visitors are not yet fleeing Macau en masse, but their interest is undoubtedly growing in other locations.