International edition
June 25, 2021

Gambling hub emerging from two-year slump

Macau casinos bet on holiday gamblers

Macau casinos bet on holiday gamblers
Casino operators are wagering that high-roller and recreational gamblers alike will be spending their "lai see" money in Macau as hotel rooms fill up for Chinese New Year.
Macau | 01/30/2017

Casino operators are wagering that high-roller and recreational gamblers alike will be spending their "lai see" money in Macau as hotel rooms fill up for Chinese New Year.


ooms at Wynn Resorts Ltd's US$4.4 billion Palace casino featuring a fountain show synchronized to music, as well as those at the Wynn Macau, Banyan Tree, StarWorld and the Ritz-Carlton had at least 80 per cent of their standard hotel rooms booked over the Jan 27 to Feb 6 period, according to a Morgan Stanley survey.

Hotel room rates at the Venetian, Sands Macao and Sheraton have risen at least 20 per cent for this Chinese New Year compared to last year, according to the survey, conducted on Jan 16.

Packed hotels during the lunar new year holiday will help the world's largest gambling market as it emerges from a two-year slump. The industry is reinventing itself with more family-friendly resorts and attractions to draw recreational spenders and casual gamblers.

"We're looking for strong hotel bookings with rooms filled with more high-value customers than we've seen in recent history, which should lead to very strong Chinese New Year gross gaming revenue," said Macau-based Union Gaming Group analyst Grant Govertsen.

"Casino operators are bullish about their VIP and premium mass market businesses for the upcoming holiday period"

Gaming revenue recovery extended to a fifth month in December and is expected to rise 8.5 per cent this month from a year ago, according to the median estimate of eight analysts surveyed by Bloomberg News.

A separate survey by Deutsche Bank AG showed that six of Sands China Ltd's seven hotels were fully booked for at least three of the days during the Chinese New Year period. It's a sharp improvement from the National Day holidays in October known as Golden Week, analyst Karen Tang said in a note Jan 23.

VIP gaming, measured by revenue from the baccarat card games favored by high-stakes gamblers from China, rose 13 per cent in the last three months of 2016, marking a turnaround since the first quarter of 2014. China's crackdown on corruption and illegal outflows, which scared off high stakes players, prompted casino operators to shift their focus to the leisure market.

Wynn Resorts opened Wynn Palace, which attracts more premium gamblers, in August and Las Vegas Sands Corp began operating the US$2.9 billion Parisian Macau in September

MGM Resorts International is planning to open the US$3.1 billion MGM Cotai in the second half of this year

Competition Hotel operators trying to fill their rooms are lowering their rates amid the intense competition.

"Studio City rooms are heavily discounted compared to most peers," Morgan Stanley analysts led by Praveen Choudhary wrote in a Jan 17 note, citing its survey of hotel bookings for the Chinese New Year period.

"Although the opening of Parisian as well as VIP rooms in November helped room utilisation at Studio City, we think the property is still facing competition from Parisian and Palace."

Hotel occupancy levels at the Wynn Palace are at the mid 90 per cent range, the company said in an investor call after earnings were released Thursday. Wynn Macau posted a 96 per cent occupancy rate in the fourth quarter.

The newer resorts may be cannibalizing overall revenue of older properties. Sands China yesterday said its Parisian property generated net revenue of US$344 million on its first full quarter of operation. Meanwhile, its two other properties - The Venetian and Sands Cotai Central - saw their combined revenue drop by US$116 million in the final three months of 2016.

What is your opinion about this article?
  • I like it
    0 votos
  • I don't like it
    0 votos
  • I have not thought about it
    0 votos
Leave your comment
Newsletter Subscription
Subscribe to receive the latest news and updates
Enter a valid email
Complete the captcha
Thank you for registering to our newsletter.
Follow us on Facebook