Post by Blitz on Nov 22, 2024 10:30:40 GMT -5
Shifts expected in Macau gaming dynamics in coming years, but Sands and Galaxy to maintain dominance: Jefferies
By Kelsey Wilhelm - November 22, 2024
agbrief.com/news/macau/22/11/2024/shifts-expected-in-macau-gaming-dynamics-in-coming-years-but-sands-and-galaxy-to-maintain-dominance-jefferies/
Analysts at Jefferies are largely in line with the Macau government’s estimates for gross gaming revenue in 2025, at MOP245.08 billion ($30.57 billion), a 2 percent increase from recently announced official estimates, as consumer sentiment towards China’s fiscal policy stabilizes and competition from other travel destinations normalizes.
GGR for 2024 is expected to total MOP226.21 billion ($28.21 billion), a yearly uptick of 23.57 percent, in line with market estimates of MOP227 billion ($28.32 billion), and equating to 84 percent of 2019 levels.
Mass revenue this year targeted to total nearly MOP172.65 billion ($21.54 billion) – up by 25.25 percent, while VIP should reach MOP53.56 billion ($6.68 billion), an 18.45 percent yearly uptick.
What the future holds
During both 2025 and 2026, expectations are for mass to remain the key driver for GGR growth, particularly the premium mass segment.
This is backed by an expected growth in tourist arrivals, hotels upgrading suites to attract premium mass players, new attractions and events and the aforementioned factors.
Particularly for mass, the 2025 GGR estimate is MOP189.92 billion ($23.7 billion), up by 10 percent yearly, while VIP is expected to rise slightly by 3 percent, to MOP55.16 billion ($6.88 billion).
Looking forward to 2026, GGR growth is estimated at 6.6 percent, to MOP261.38 billion ($32.61 billion).
Mass revenue is expected to grow by 8 percent yearly, to MOP205.11 billion ($25.6 billion), while VIP growth will slow to 2 percent, at MOP56.27 billion ($7.02 billion).
The gaming results are backed by expectations of increased visitation, with 5.3 percent and 4.9 percent yearly growth in tourist numbers for 2025 and 2026, respectively. This would increase the predicted 35.14 million tourists in 2024 to 37.02 million in 2025 and 38.83 million in 2026.
Average spend per visitor is expected to reverse its negative yearly comparisons by 2025 (after a 0.8 percent drop in 2024), rising by 2.9 percent in 2025 and by 1.7 percent in 2026.
During the periods, market share is expected to shift slight, despite being dominated by Sands China, which should dominate 24.4 percent of the market in 2024.
Overall Sands and Galaxy are expected to maintain their leadership positions of over 20 percent market share each, at the expense of MGM China, Melco, SJM and Wynn.
Sands will continue to lead
The analysts point out that, while Sands is expected to maintain its dominant position, ‘a return of base mass is crucial’, with management noting a break in correlation between visitation and gaming revenue.
To tap this, the reopening of The Londoner Grand Casino, accompanied by more rooms coming online and driving attendance at its revamped Venetian Cotai Arena (opening in December of this year) will be key.
Regarding rooms, some 1,300 Londoner suites and rooms should come online by Chinese New Year of 2025, with 1,500 suites and 905 rooms in service by Golden Week of 2025.
This should help boost GGR by 14 percent yearly in 2025, increasing its market share to 25.7 percent.
Galaxy a close second
Looking at Galaxy, the analysts note that ‘its entertainment strategy has paid off as […] programs are player centric with positive impact to both gaming and non-gaming revenues’.
A particular highlight is enhancements to stay competitive, including upgrades to its gaming floor and lobby at StarWorld, the opening of Hotel Capella at Galaxy Macau – with 100 ultra-luxury sky villas and suites, its strong focus on non-gaming in Galaxy Macau Phase 4 (expected to be completed in 2027 and include new high-end hotel brands and a 5,000-seat theater, water resort deck and casino) and its ramp up of its convention center, Arena, Raffles and Andaz hotels.
GGR for Galaxy is expected to increase by 16 percent in 2025, raising its market share to 20 percent.
Market share shifts
Predictions for market share vary over the coming years, despite Sands and Galaxy maintaining their dominance.
MGM is expected to record market share of 15.6 percent this year, shrinking to 14.2 in 2025 and further falling to 14 percent in 2026.
Wynn is predicted to have 13.4 percent market share this year, up to 13.5 in 2025 and remaining so in 2026.
For SJM, market share of 13.1 percent is expected in 2024, down to 12.7 percent in 2025 and 12.1 percent in 2026.
Jefferies only covers the five operators, excluding Melco from their estimates.
By Kelsey Wilhelm - November 22, 2024
agbrief.com/news/macau/22/11/2024/shifts-expected-in-macau-gaming-dynamics-in-coming-years-but-sands-and-galaxy-to-maintain-dominance-jefferies/
Analysts at Jefferies are largely in line with the Macau government’s estimates for gross gaming revenue in 2025, at MOP245.08 billion ($30.57 billion), a 2 percent increase from recently announced official estimates, as consumer sentiment towards China’s fiscal policy stabilizes and competition from other travel destinations normalizes.
GGR for 2024 is expected to total MOP226.21 billion ($28.21 billion), a yearly uptick of 23.57 percent, in line with market estimates of MOP227 billion ($28.32 billion), and equating to 84 percent of 2019 levels.
Mass revenue this year targeted to total nearly MOP172.65 billion ($21.54 billion) – up by 25.25 percent, while VIP should reach MOP53.56 billion ($6.68 billion), an 18.45 percent yearly uptick.
What the future holds
During both 2025 and 2026, expectations are for mass to remain the key driver for GGR growth, particularly the premium mass segment.
This is backed by an expected growth in tourist arrivals, hotels upgrading suites to attract premium mass players, new attractions and events and the aforementioned factors.
Particularly for mass, the 2025 GGR estimate is MOP189.92 billion ($23.7 billion), up by 10 percent yearly, while VIP is expected to rise slightly by 3 percent, to MOP55.16 billion ($6.88 billion).
Looking forward to 2026, GGR growth is estimated at 6.6 percent, to MOP261.38 billion ($32.61 billion).
Mass revenue is expected to grow by 8 percent yearly, to MOP205.11 billion ($25.6 billion), while VIP growth will slow to 2 percent, at MOP56.27 billion ($7.02 billion).
The gaming results are backed by expectations of increased visitation, with 5.3 percent and 4.9 percent yearly growth in tourist numbers for 2025 and 2026, respectively. This would increase the predicted 35.14 million tourists in 2024 to 37.02 million in 2025 and 38.83 million in 2026.
Average spend per visitor is expected to reverse its negative yearly comparisons by 2025 (after a 0.8 percent drop in 2024), rising by 2.9 percent in 2025 and by 1.7 percent in 2026.
During the periods, market share is expected to shift slight, despite being dominated by Sands China, which should dominate 24.4 percent of the market in 2024.
Overall Sands and Galaxy are expected to maintain their leadership positions of over 20 percent market share each, at the expense of MGM China, Melco, SJM and Wynn.
Sands will continue to lead
The analysts point out that, while Sands is expected to maintain its dominant position, ‘a return of base mass is crucial’, with management noting a break in correlation between visitation and gaming revenue.
To tap this, the reopening of The Londoner Grand Casino, accompanied by more rooms coming online and driving attendance at its revamped Venetian Cotai Arena (opening in December of this year) will be key.
Regarding rooms, some 1,300 Londoner suites and rooms should come online by Chinese New Year of 2025, with 1,500 suites and 905 rooms in service by Golden Week of 2025.
This should help boost GGR by 14 percent yearly in 2025, increasing its market share to 25.7 percent.
Galaxy a close second
Looking at Galaxy, the analysts note that ‘its entertainment strategy has paid off as […] programs are player centric with positive impact to both gaming and non-gaming revenues’.
A particular highlight is enhancements to stay competitive, including upgrades to its gaming floor and lobby at StarWorld, the opening of Hotel Capella at Galaxy Macau – with 100 ultra-luxury sky villas and suites, its strong focus on non-gaming in Galaxy Macau Phase 4 (expected to be completed in 2027 and include new high-end hotel brands and a 5,000-seat theater, water resort deck and casino) and its ramp up of its convention center, Arena, Raffles and Andaz hotels.
GGR for Galaxy is expected to increase by 16 percent in 2025, raising its market share to 20 percent.
Market share shifts
Predictions for market share vary over the coming years, despite Sands and Galaxy maintaining their dominance.
MGM is expected to record market share of 15.6 percent this year, shrinking to 14.2 in 2025 and further falling to 14 percent in 2026.
Wynn is predicted to have 13.4 percent market share this year, up to 13.5 in 2025 and remaining so in 2026.
For SJM, market share of 13.1 percent is expected in 2024, down to 12.7 percent in 2025 and 12.1 percent in 2026.
Jefferies only covers the five operators, excluding Melco from their estimates.