Visitors Flooding Into Macau Raise Holiday Hopes for Casinos
(Bloomberg) -- There’s a ray of hope in the gloomy outlook for Macau casinos.
Early numbers are showing a healthy stream of visitors to the world’s biggest gambling hub during Golden Week, helping to alleviate investor fears that the holiday will be a major disappointment. Chinese arrivals in Macau for Oct. 1 to Oct. 2 jumped 27 percent from a year earlier, according to the Macau Government Tourist Office. That’s the best two-day start to Golden Week in at least six years.
The Bloomberg Intelligence gauge of Macau casino stocks closed 1.2 percent higher on Wednesday. Sands China Ltd. climbed 2.6 percent and MGM China Holdings Ltd. advanced 0.8 percent in Hong Kong.
The benchmark gauge has slumped 36 percent since May amid a parade of bad news for the industry. It slipped 2.8 percent on Tuesday after data showed Macau’s gross gaming revenue rose at the slowest pace in two years last month, weighed down by a typhoon that temporarily shut casinos and a pullback by high-stakes bettors.
In the U.S., shares of companies with casinos in Macau also rose, with Wynn Resorts Ltd. up as much as 4.5 percent, and MGM Resorts International and Las Vegas Sands Corp. gaining up to 3.8 percent.
With a slowing Chinese economy and trade tensions with the U.S. contributing to softening gaming revenue growth since the second quarter, expectations for Golden Week have been muted. Weak pre-holiday hotel bookings haven’t helped sentiment. The surprisingly strong visitor numbers may restore some faith in the industry’s resiliency after 26 straight months of revenue gains in Macau.
“Positive drivers for Macau’s Golden Week include the fact that Macau and Hong Kong still have the greatest appeal given better connectivity, ease of access and milder weather conditions,” said Bloomberg Intelligence analyst Margaret Huang.
Huang expects Macau’s gaming revenue for all of October could surpass 28 billion patacas ($3.5 billion) for the first time since 2014, aided by pent-up demand including by those who stayed away because of Typhoon Mangkhut.
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