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China – Second quarter mass revenue and EBIDTA could edge close to 2019 levels in Macau

By - 27 June 2023

Analyts at Morgan Stanley believe Macau’s casino sector EBITDA will hit US$1.6bn in the second quarter, marking a 46 per cent increase from the first quarter with both mass revenue and EBITDA closing in on pre-pandemic figures.

Morgan Stanley’s Praveen Choudhary, Gareth Leung and Stephen Grambling predict that second quarter mass and slot revenues will increase by 29 per cent from the first quarter to US$4.79bn.

The analysts said: “Spending per visitor is tracking 50% above 2019 level. Further upside to mass revenue could come from recovery in package tours, visitation from provinces further away from Macau and improving capacity for ferry and air travel. We forecast industry mass revenue to reach 115% and 125% of 2019 level in 2024 and 2025.”

“We expect MGM’s 2024 mass market share at 13 per cent and 2Q could be tracking at 14 per cent to 15 per cent (16 per cent in 1Q),” they added. “This means 2024 mass revenue to be at least 30 per cent above 2019 even if we assume no growth in industry mass revenue vs 2019. Consensus forecasts MGM 2024 EBITDA to be only 10 per cent above 2019, which probably does not give enough credit to its market share or the benefits of operating leverage. Our 2024 EBITDA for MGM is 30 per cent higher than 2019.”

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