According to Morgan Stanley Asia Ltd, the number of tourists who visited Macao in May increased, but the level of gross gaming profit (GGR) in Macau fell more than 2 times compared with April.
Attendance of Macau in May affected the level of GGR
According to information provided on Friday by the City Statistics and Census Service, the total number of visitors to Macau in May was just over 2.7 million, which is 5.2% more than in the previous year, and the number of tourists from the mainland of China increased by 9 , 3%. Both these indicators show an improvement in terms of the total influx of tourists compared to May 2017, which was 3.7%.
However, as reported in Morgan Stanley, attendance in May 2018 fell. The company noted that the main reason for the reduction of GGR from 27.6 to 12.1% was “a decrease in the level of profit from the VIP sector” in the city’s casinos.
“According to Bloomberg, in May mass profit increased only by 8.3% per annum (compared to 19% in the first quarter of 2018 and 28% in April),” Morgan Stanley said.
The gradual decline in GGR in the mass segment, most likely, was triggered by the slower “growth in the number of Chinese tourists – by 9.3% per annum (compared to 13% in the first quarter of 2018 and 17% in April).” The assessment of such a change in the GGR market in May is based on the informal income of the industry.
Other investment analysts noted that there should be a direct relationship between the number of tourists coming to Macau and their spending on gambling in the casino. And all because of the fact that during the study it was found out that high-stakes games for a relatively small number of visitors are still an important component of the market.
Morgan Stanley suggested that a weaker annual increase in mass profit in May, as evidenced by Bloomberg’s data, could be a result of such factors as a lower number of days off in the month compared to the same period of the previous year, and a decline in the May Gold Week .
Recall: named after the dream god from Greek mythology, the new hotel Melco Resorts worth $ 1.1 billion is the last addition to the third phase of the complex City of Dreams Macau.