Macau new year visitors rise, but unclear if they came to gamble

macau-visits-up-gambling-flatMacau enjoyed a surge in visitation over the lunar new year festivities but it’s not clear how many of those visitors spent time or money at gambling tables.

The Macau Government Tourist Office says the special administrative region recorded 1.076m visitor arrivals from Feb. 7-14, a 4.7% gain over the initial period of the 2015 new year celebrations. Visitation from the Chinese mainland was up 4.3% to over 793k during this period. But they appear to have gotten lost on their way to the baccarat tables.

A research note issued by Wells Fargo Securities suggested that “mass tables remain quiet” despite the increased arrivals. The note went on to say that the arrivals boost was notable for the number of middle-class families displaying a “higher propensity to enjoy non-gaming amenities and lower propensity to gamble.”

Given this apparent aversion to gambling, Wells Fargo believes there’s little reason to bank on hopes that February will break Macau’s 20-month streak of falling gaming revenue. The note predicted February’s gaming revenue total would decline 14% year-on-year when the final numbers are revealed.

Nomura analysts claimed average daily revenue at gaming tables was down 20% from the same period last year, which is better than earlier projections, but Nomura still predicted February’s final numbers would be down 6% to 10% year-on-year.

Assuming the reports are accurate, the irony here is immense, as governments in both Macau and Beijing have been pressing Macau casinos to expand their non-gaming offerings, despite the belief by some casino bosses that non-gaming in Macau “will never make any money.”

Wells Fargo’s anecdotal reports run contrary to early reports from both MGM China and Sands China that their properties were expecting either to hold their own or show slight gains over last year’s holiday numbers. And Union Gaming analysts said they’d received similar reports of “solid mass trends” at both peninsula and Cotai operators during this year’s holiday.

Whatever February’s results, January saw Melco Crown Entertainment enjoy its best ever month in terms of market share. According to numbers crunched by brokerage Sanford C Bernstein, Melco Crown claimed 16.7% of January’s gaming revenue, up 0.5 points from December and a new high-water mark for the company.

The gains came despite continued underperformance by Melco Crown’s new Studio City property, which opened last October with no VIP tables. Despite its mass emphasis, the Bernstein report says Studio City claimed only 3.5% of January’s mass gaming share, 0.5 points below its December numbers, with both figures being “well below fair share.”

Sands China remained the market share king in January, although its slice of the pie shrank 0.4 points to 23.2%. That was still enough to outpace Galaxy Entertainment Group, which slid 1.2 points to 22%, while SJM Holdings was also down 1.2 points to 19.1%. Wynn Macau gained 0.7 points to 9.8%, good enough for fifth place, while cellar dweller MGM China scored the month’s biggest gain, rising 1.7 points to 9.2%.