Macau GGR Continues to Recover As It Reaches A Post-Pandemic High

Summary:

• The Premium mass market sector in Macau has fully recovered as of July 2023
• July’s results are the best since the pandemic, recovering to 92-93% of 2019 levels
• Macau’s hospitality industry is also recovering well with more hotels being built

Overall gross gaming revenue (GGR) in Macau has come closer to reaching pre-pandemic levels, with the July results representing 92-93% of 2019 figures, according to a note recently issued by JP Morgan Securities (Asia Pacific) Ltd.

The premium mass segment was among the best performers of the month, recovering to more than 100% of pre-COVID figures, the note stated.

Premium Mass Achieves Full Recovery in July

Latest data from Macau’s gaming regulator, the Gaming Inspection and Coordination Bureau, show casino GGR hit MOP16.66 billion (US$2.07 billion) in July, up 9.6% from the previous month. This represents the best result for the city’s gaming sector since the COVID-19 pandemic. July’s figures went above the GGR recorded in May which was previously the best monthly performance since January 2020.

JP Morgan analysts Mufan Shi and DS Kim said that figure represents a 92-93% recovery, compared to 87-88% in the second quarter of 2023.

Premium mass achieved another post-pandemic high, showing a 100% plus recovery in July, compared to the 80% recorded by the grind/base mass segment.

Premium mass gambling involves cash play at high minimum bets. It differs from VIP betting in that it does not implement a credit and rolling chip system. The latter also posted a strong recovery in July, recovering to 27-28% versus 24-25% in the second quarter, but it didn’t have much of an impact on cash flows and earnings before interest, taxation, depreciation, and amortization (EBITDA), JP Morgan noted.

Based on July’s results, Macau’s daily GGR run rate for the month sat at MOP537 million, an increase of 7.4% from the MOP500 million daily average recorded in Q2 of 2023. That translates to a 68% recovery on 2019 levels. As the month came to a close, GGR run rate most probably increased to MOP 600 million per day, according to JP Morgan.

The analysts said the July figures are pretty respectable considering the effects of Typhoon Talim which caused a shutdown of public transport across the city.

More Hotel Rooms in Macau

As Macau’s gaming industry continues to recover, so does the city’s hospitality sector, with more hotel rooms being developed as of June. The government announced that there are around 17 hotel projects currently under construction or awaiting approval as of the second quarter of 2023, with most of the new projects being built on Cotai.