Macau’s Golden Week to miss market expectations

According to brokerage Sanford C. Bernstein, the territory’s operators will underperform during the October holiday period.

Macau.- Macau’s Golden Week, a holiday period during the first week of October is set to report lower results than expected, brokerage Sanford C. Bernstein Ltd said. According to analysts Vitaly Umansky, Zhen Gong and Kelsey Zhu, the territory will miss market expectations in terms of hotel occupancy.

“Golden Week is shaping up to be weaker than initially expected,” analysts wrote in a memo and added: “While hotel bookings looked strong going in, recent checks of online travel agencies, group travel and property websites imply remaining room availability.”

According to the brokerage, “there was a similar development” during 2017, “with initially strong bookings that did not result in outsized gross gaming revenue.”

Even as hotel occupancy isn’t as high as the market originally expected, analysts say the amount of visitors is not directly related to the volumen of gaming revenue, as Macau’s market is mainly pushed by high-stakes gambling. According to Sanford Bernstein, October’s GGR is still expected to grow between 4% to 6% year-on-year, which would mean a 26-29% jump from last month.

JP Morgan Securities Asia Pacific Ltd also highlighted Golden Week’s importance as analysts DS Kim and Sean Zhuang wrote that “all eyes will be on demand trends during Golden Week (October 1 to 7), such as junket feedback and industry consultants’ weekly GGR estimates,” and forecasted a 3%-5% GGR growth for October.