Operator News
China – CBRE sees another 30 per cent growth spurt for Macau over 2024
By Phil - 14 March 2024
Analysts at CBRE Institutional Research are predicting that Macau’s casino sector will grow by a further 30 per cent this year as the mass market sector continues to boom. It is predicting GGR of US$28bn in 2024 and US$29bn in 2025.
CBRE’s Colin Mansfield and Connor Parks said: “This year, visitation and gaming revenue should grow by nearly 30 per cent and level-off closer to China GDP-type growth thereafter. The growth should be primarily driven by further improvements in mass market visitation, which can also support property-level margins. De-leveraging will be a by-product of EBITDA growth.”
They praised Macau’s casino operators for doing a ‘good job’ with transforming their former junket rooms into new premium mass gaming floors and shifting the market focus from VIP to mass gaming which they see as a ‘long-term positive.’
“The mass market has essentially returned to 2019 levels and now accounts for 90 per cent of total gross gaming revenue. We see further upside in the segment since visitation still is 10 per cent below 2019 levels. The additional visitation should help operators optimize hotel yield and take advantage of newer supply directed at premium mass customers that has opened since the pandemic.”
“Operators have done a good job of repositioning old junket rooms into gaming parlors and selectively growing direct VIP business,” they added. “Overall, we view the submission of the VIP segment as a long-term positive. It was notoriously volatile and contributed to multiple instances of heightened regulatory scrutiny by the Chinese central government.
“Success of other non-junket markets like Singapore give us confidence that Macau is better positioned in the long run, even if it means a slower recovery from the pandemic than its neighboring jurisdictions (on a relative basis). The gaming industry should be an indirect benefit from greater tourism-driven visitation to the region and more seamless cross-border travel.”
