Analysts might have some very well educated guesses as to how the Macau casino industry will come out of the rocky year its having, but the best information might come from the source itself. Wynn Resorts, operator of the Wynn Macau, thinks it might not get any better.
Macau Business reports the operator is trying to lower expectations for the rest of 2019, as it otld the U.S. Securiteis and Exchange Commission that it expects the third quarter of 2019 to continue to be bad, primarily because of the ongoing U.S-China trade war and continuing Hong Kong protests. Both are expected to hurt VIP revenue.
‘We anticipate our Macau operations’ casino revenues and Adjusted Property EBITDA for the third quarter of 2019 will be negatively impacted by significantly lower VIP gaming turnover resulting from a variety of factors in the region, including the ongoing trade dispute between the U.S. and China and disruptions in Hong Kong,” Wynn wrote.
Surprisingly though, the casino’s net gambling revenues have shown an increase so far in 2019, going up 1.1% year-on-year to MOP8 billion ($1 billion), while adjusted property EBITDA dropped 6.8 per cent to $167.2 million.
But that looks to be quickly changing, and August was particularly bad, as worsening tariffs and protests caused a lower than expected hold in Wynn’s VIP operations. They’re hoping mass market visitors can make up the gap, but that hasn’t been a money making play in Macau just yet for other operators.
If there’s any consolation for Wynn Resorts, its that things look like they might be getting better before they get any worse. The U.S-China trade war has reached a breaking point, where both sides appear to be gun shy on making tariffs any stronger, and a deal might be the only sane option available.
The same can’t necessarily be said about Hong Kong though. Despite some concessions having been made by China, protestors continue to demand greater liberties and separation from their super power big brother, and protests continue to drag on.