The recovery in Macau’s casino sector strengthened in July, with gaming revenue returning to about 68% of pre-pandemic levels as tourists flocked to the gambling hub during the summer vacation period.
Gross gaming revenue surged 4,083% from a year earlier to 16.7 billion patacas ($2.1 billion), according to data released by the Gaming Inspection and Coordination Bureau. The huge percentage increase reflects Macau’s Covid Zero rules that saw casinos shut for almost two weeks in July last year.
The result topped the median analyst estimate of a 3,922% increase, and is the highest monthly takings since January 2020.
Key Insights
- Performance was boosted by the summer holiday travel season in China, the largest source of tourists to Macau. Visitor arrivals in June returned to 71% of the pre-pandemic levels, according to the latest data available, with July figures due to be released later this month.
- Hotel occupancy rate reached 89% in early July and is expected to maintain around this level during the vacation season, according to Maria Helena de Senna Fernandes, head of the city’s tourism office.
- Gaming revenue for the full year is likely to return to 62% of the pre-Covid level, a Bloomberg survey of estimates from six brokerages show. Gambling income generated from the mass tourist market, the most important indicator of casino profits, is expected to reach almost 90% of the pre-Covid levels this year, the survey shows.
- Investors are also set to get further insight into the state of the sector as Macau’s six casino operators report financial results for the second quarter. Sands China Ltd. saw earnings before interest, taxes, depreciation, and amortization for the period reach $541 million, according to parent Las Vegas Sands Corp. That was the highest since Covid and a 71% recovery compared with the same quarter in 2019.
- Despite potential catalysts to come including an increasing number of hotel rooms and more concerts and exhibitions, Macau’s recovery outlook could be darkened by China’s economic slowdown, with the property market slumping, and retail sales and manufacturing showing no sign of picking up. The city could also see fewer tourists visiting later in the year if China adds more international flights.
Market Performance
- A Bloomberg Intelligence index of Macau casino operators rose 12% in July, while the benchmark Hang Seng Index rose 6.2% in the same month.
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