Operator News

China – Macau devastated by worst typhoon for half a century

By Phil - 25 August 2017

Macau has been left devastated by the most powerful typhoon to hit the southern Chinese region in more than half a century.

Typhoon Hato has killed 16 people and injured 150 more with 27,000 people being evacuated to emergency shelters. The Macau government said it was still working to restore water and electricity supplies to the city.

Gaming revenues at the city’s casinos will be hit with a ‘negative impact’ of five to six per cent in August following the typhoon. Sociedade de Jogos de Macau (SJM) was the worst operator affected with both Grand Lisboa and Lisboa’s entrances blocked by the damage, followed by MGM Cotai, which is still being built showed clear damage.

Union Gaming’s Grant Govertsen said: “Being only based on the peninsula will have a disproportionate impact for these two companies. Further, and while we don’t believe MGM Cotai experienced any worse damage than any other property in the market, the sudden surge in demand for construction labor could
Mr. Govertsen explained that VIP revenue would be most affected by the typhoon.

“We would attribute this to the relative inability of mass market customers to redirect an already-planned holiday,” he said. “As such, we would expect the low-end of mass market to remain robust despite the typhoon. However, those customers with the ability to easily change their plans – namely premium mass and VIP customers – are likely to lay low for a while, both out of convenience to themselves and also out of political expediency given the sensitivities of gambling during a now-sensitive time period. This will also have a disproportionately negative impact on the high-end heavy peninsula.”

MGM China put out the following statement: “The resort is working very diligently to take care of our existing guests and communicate with any incoming guests. We have sustained some damage to the building, which is relatively minor and we believe will not have any impact on our return to normal operations,” MGM China said. “While the typhoon has now passed, the recovery will take some time and we stand ready to support the Macau community and our staff.”

Melco Resorts added: “Our properties have suffered minimal external damages which will be repaired over the next few days. City of Dreams and Studio City remain fully operational. Altira has suffered from some power shortages, so we have decided to take preemptive measures by relocating guests to our Cotai properties.”

Brokerage Sanford C Bernstein confirmed that closures and power outages continuing to affect the city.

Analysts there Vitaly Umansky and Zhen Gong revised their GGR forecast to between MOP$22.2bn and MOP$22.8bn for August, representing an increase of 18 to 21 but down down from the previous estimate of 24 to 26 per cent.

“We are now reducing our August estimate as a result of the disruptions,” they said.

Chinese People’s Liberation Army (PLA) troops have been deployed onto the streets to help with the clear-up.