Macau casinos are shifting their emphasis from VIP to mass-market segment and CLSA’s regional head of consumer & gaming research Aaron Fischer says it’s a battle for market share from now on.
During the Global Gaming Expo (G2E) Asia press conference on Tuesday, Fischer said that CLSA’s outlook on Macau casino VIP business remains negative but expects the mass market to make up for the drop in high-roller gamblers.
“We think that it [VIP market] peaked in 2013 and that it won’t recover. So we generally remain cautious on VIP, but the mass market can grow [in the future].”
New or existing casino properties in the region are now focusing on being genuine leisure resorts appealing to mass customers. The most prominent example is Melco Crown’s Studio City, which opened on October 27. The $3.2B Hollywood-themed casino complex has a diverse portfolio of non-gaming entertainment offerings designed to cater to the mass-market segment. Studio City also offers 1,600 hotel rooms in Macau, in addition to world’s highest Ferris wheel and a 40,000 square-foot Warner Bros. indoor play center.
Fischer also predicted that Macau’s latest entrants are likely to gain market share in the near future and Macau will see a modest growth in gross gaming revenue this year with further improvement in 2017.
The Parisian, Las Vegas Sands’ 3,000-hotel-room, $2.7 billion development with a faux Eiffel Tower, is expected to open in the second half of 2016 while MGM plans to open its $3.1 billion MGM Cotai by the end of the year.
Wynn Resorts delayed the opening of its $4.1 billion Wynn Palace on Cotai until June 25 due to construction issues.
Overall the firm believes that Macau gaming is still in very good shape and that there is no need to pity the casino operators as they still earn “reasonable profits.”
G2E Asia is an annual casino industry trade show and conference held in Macau. This year, it will be held from May 17 to 19, at the Cotai Expo at the Venetian Macao. Organizer Reed Exhibitions reveals that more than 180 exhibitors have confirmed attendance.
