Post by Blitz on Sept 4, 2024 7:53:09 GMT -5
CLSA: Macau’s October Golden Week bookings looking strong
Ben Blaschke by Ben Blaschke Wed 4 Sep 2024 at 14:23
www.asgam.com/index.php/2024/09/04/clsa-macaus-october-golden-week-bookings-looking-strong/
The early signs ahead of next month’s Golden Week holiday, running from 1 to 7 October, appear positive for Macau gaming operators, with hotels already filling up and room rates rapidly on the rise, according to brokerage CLSA.
In a research report issued Wednesday, CLSA analysts Jeffrey Kiang and Leo Pan said that 28 of the 34 Macau hotels they track, or 82%, are already fully booked for the weekend of 5 to 6 October, while most of those that still have rooms available have raised prices over the past week.
“Demand for hotel bookings on Trip.com for 5 to 6 October has heated up over the past three weeks,” they said. “While the number of fully booked hotels has stayed at 82%, hotel prices continue to rise week-on-week. As of 30 August, five out six hotels with rooms available raised room prices week-on-week (Broadway, Andaz Macau, Studio City Hotel, W Macau and Sofitel Macau at Ponte 16 raised room prices) – significantly more than last year when only one out of seven hotels raise room prices at six weeks out.
“We note that based on historical data, room supply is set aside ahead of seasonally high periods such as October Golden Week for promotional purposes. More rooms will be released to public over the coming weeks as operators gain more visibility on demand.”
The analysts added that Galaxy and MGM China properties remain the most popular with, on average, six out of eight Galaxy hotels and both MGM China’s properties being fully booked out since 1 June (on a +1 week basis), while SJM’s [peninsula property] Grand Lisboa has been fully booked out every week since 1 June on a one-week leading basis. Cotai’s Grand Lisboa Palace, on the other hand, was the one IR to lower room rates over the past week for Golden Week.
Nevertheless, CLSA said hotel rates were starting to trend upwards again for bookings one week ahead, having pulled back to US$477 from a post-COVID high at US$624 at the end of August.
“This is consistent with the historical seasonal trend of hotel prices steadily climbing through 2Q/3Q before resetting into October Golden Week,” Kiang and Pan wrote.
“On a four-week leading basis, pricing data has pulled back to US$499 after peaking mid-August at US$645; matching the trend observed in one-week leading data.”
Looking more broadly, CLSA said investor concerns over Macau’s widely touted crackdown on illicit money exchange was “likely overdone” with the 6% month-on-month growth in GGR in August suggesting “signs of stabilization of the crackdown.”
But they still cut their 2024 and 2025 GGR forecast by 2%, with 2024 GGR now estimated at US$28.4 billion and 2025 at US$29.6 billion. Their sector EBITDA forecast has been cut by 3% in 2024 and 4% in 2025 to US$7.9 billion and US$8.9 billion respectively on higher staff costs.
Ben Blaschke by Ben Blaschke Wed 4 Sep 2024 at 14:23
www.asgam.com/index.php/2024/09/04/clsa-macaus-october-golden-week-bookings-looking-strong/
The early signs ahead of next month’s Golden Week holiday, running from 1 to 7 October, appear positive for Macau gaming operators, with hotels already filling up and room rates rapidly on the rise, according to brokerage CLSA.
In a research report issued Wednesday, CLSA analysts Jeffrey Kiang and Leo Pan said that 28 of the 34 Macau hotels they track, or 82%, are already fully booked for the weekend of 5 to 6 October, while most of those that still have rooms available have raised prices over the past week.
“Demand for hotel bookings on Trip.com for 5 to 6 October has heated up over the past three weeks,” they said. “While the number of fully booked hotels has stayed at 82%, hotel prices continue to rise week-on-week. As of 30 August, five out six hotels with rooms available raised room prices week-on-week (Broadway, Andaz Macau, Studio City Hotel, W Macau and Sofitel Macau at Ponte 16 raised room prices) – significantly more than last year when only one out of seven hotels raise room prices at six weeks out.
“We note that based on historical data, room supply is set aside ahead of seasonally high periods such as October Golden Week for promotional purposes. More rooms will be released to public over the coming weeks as operators gain more visibility on demand.”
The analysts added that Galaxy and MGM China properties remain the most popular with, on average, six out of eight Galaxy hotels and both MGM China’s properties being fully booked out since 1 June (on a +1 week basis), while SJM’s [peninsula property] Grand Lisboa has been fully booked out every week since 1 June on a one-week leading basis. Cotai’s Grand Lisboa Palace, on the other hand, was the one IR to lower room rates over the past week for Golden Week.
Nevertheless, CLSA said hotel rates were starting to trend upwards again for bookings one week ahead, having pulled back to US$477 from a post-COVID high at US$624 at the end of August.
“This is consistent with the historical seasonal trend of hotel prices steadily climbing through 2Q/3Q before resetting into October Golden Week,” Kiang and Pan wrote.
“On a four-week leading basis, pricing data has pulled back to US$499 after peaking mid-August at US$645; matching the trend observed in one-week leading data.”
Looking more broadly, CLSA said investor concerns over Macau’s widely touted crackdown on illicit money exchange was “likely overdone” with the 6% month-on-month growth in GGR in August suggesting “signs of stabilization of the crackdown.”
But they still cut their 2024 and 2025 GGR forecast by 2%, with 2024 GGR now estimated at US$28.4 billion and 2025 at US$29.6 billion. Their sector EBITDA forecast has been cut by 3% in 2024 and 4% in 2025 to US$7.9 billion and US$8.9 billion respectively on higher staff costs.