Macau’s mass gaming revenue is likely to grow by approximately four per cent quarter-on-quarter in the third quarter, “marking the first sequential increase since the first quarter of 2014,” said UBS Securities Asia.
UBS analysts Anthony Wong and Angus Chan said factors in the sequential improvement included a relaxation of official policy regarding use of transit visas by some mainland China residents visiting Macau and “new openings of hotel rooms, leading to a higher head count, helping the base mass segment.”
Macau casino operator Galaxy Entertainment Group added 1,570 hotel suites and rooms to the market with the opening on May 27 of its Galaxy Macau phase two and Broadway at Galaxy Macau properties on Cotai.
The high cost of Macau hotel rooms in recent years relative to average urban disposable income in China - plus the fact that in past years a significant portion of hotel rooms in the top casinos were reserved for use by junkets - are factors that have been seen by some analysts as a barrier to building Macau’s base mass gaming market. The junket market has been in a sustained decline in the past year.
The number of hotel rooms in Macau is set to almost double over the next few years according to official data released last month. It showed there were 22 hotel projects under construction and 30 projects undergoing government approval at the end of the second quarter of 2015. They would together provide close to 21,100 new hotel rooms in Macau.
The city had 29,279 hotel rooms at the end of June, up from 28,358 rooms at the end of March, according to the city’s Statistics and Census Service. But while there are signs of stabilisation in the mass-market segment, “the near-term outlook for VIP junket demand remains murky,” UBS said.
