VIP segment loses ground in Macau

According to Bernstein analysts, the VIP segment in Macau will drop to become just 34% of the region’s GGR by 2022 after being as much as 70% back in 2011.

Macau.- The VIP segment in Macau has traditionally driven finances in the Chinese region. However, as Bernstein analysts forecast, the vertical will drop to be 34% of the area’s GGR by 2022.

While the VIP segment was 70% of GGR in 2011, it has already dropped to 41% in 2018.

“VIP every month/ quarter is oftentimes dependent on the behaviour and luck of a relatively small number of high rollers,” Bernstein assessed. “It’s driven much more by liquidity in China (i.e., flow of credit) and liquidity in Macau (in the junket system),” AGBrief quoted the firm.

“While Mass has had some impact from policies, the policy impacts on Mass have not had as extreme an impact on this segment as on VIP.”

Macau forecasts

The Macanese region is one of the best performing segments in the world, but won’t grow very much next year. According to Fitch Ratings Inc, the Macau casino market will have only “low single-digit growth” in 2020.

Comments by Colin Mansfield, Fitch Ratings’ associate director, corporate ratings North America forecast a regular performance in the near future. 

“(Fitch is) basically expecting the VIP business to remain flat from where we are today. With some potential downside risk if things escalate a little bit further… [in] the U.S.-China trade war,” Mansfield said on Macau casino market.