Macau Gaming Rebounds 334% in 2023, Analysts Predict Second Year of Recovery
Macau, known as the gambling capital of the world, experienced an impressive rebound in gaming revenue in 2023. Analysts are now predicting that this recovery will continue into 2024, marking a second year of growth for the industry. In 2023, gaming revenue in Macau increased by a staggering 334%, reaching around 63% of the market’s 2019 level.
Despite the significant rebound, market observers note that the decline in VIP play still kept Macau’s gaming industry below 2019 levels. However, the mass market fully returned, indicating a positive trend for the sector. Macau is now in the process of not only recovering from the pandemic but also undergoing an overhaul of its casino industry.
Macau Casinos Bet on Non-Gambling Developments to Attract Visitors
In an effort to attract a wider group of visitors beyond traditional gamblers, Macau’s six casino operators are diversifying their resorts. These operators have agreed to invest a staggering $13.5 billion into non-gaming projects as part of their new 10-year gaming licenses acquired in December 2022. This commitment has increased to nearly $18 billion after a 2023 trigger led to a 20% premium on the non-gaming obligations.
The focus on nongaming developments is a strategic move by Macau casino operators to appeal to a broader demographic. By offering a range of entertainment options, these casinos hope to attract visitors who are not solely interested in gambling. This approach aligns with the changing dynamics of the industry and reflects the region’s efforts to adapt to evolving consumer preferences.
Analysts Expect Macau’s Gaming Revenue to Recover to 82% of 2019 Levels in 2024
Macau’s gaming industry is expected to show further signs of progress in 2024. Analysts from CLSA Limited, a Hong Kong-based financial services firm, predict that the gross gaming revenue (GGR) in Macau will recover to 82% of 2019 levels this year. In 2019, Macau’s casinos won a total of $36.3 billion, making the projected 2024 casino win around $29.8 billion, representing a significant year-over-year improvement of over 30%.
The CLSA analysts attribute the slow recovery in the first half of 2023 to labor shortages and transportation capacity limitations. However, they anticipate a more robust period in 2024, particularly during important holidays such as Chinese New Year, Labor Day, and National Day. These celebrations are expected to attract a larger number of visitors, contributing to the overall recovery of the gaming sector.
Robust Holiday Season Expected to Boost Macau’s Gaming Industry in 2024
One key factor that analysts believe will contribute to Macau’s gaming industry recovery in 2024 is the robust holiday season. Chinese New Year, which falls in February, is particularly significant and is expected to attract a high volume of visitors. This holiday, along with other major holidays like Labor Day and National Day, provides an opportunity for the casinos to capitalize on increased tourism and visitor spending.
The positivity surrounding the holiday season, combined with the ongoing recovery efforts, paints a promising picture for Macau’s gaming industry in 2024. The anticipation of increased revenue during these holiday periods is further fueling confidence in the sector’s growth potential.
Macau Faces Headwinds in Attracting Visitors, Nomura Analysts Say
While the gaming industry in Macau is on a path to recovery, attracting visitors remains a challenge. Nomura analysts caution that Macau may not be able to reach its 2019 visitation levels this year. In 2023, Macau welcomed approximately 28.2 million visitors, which is only 71.5% of the 39.4 million travelers recorded in 2019.
The analysts attribute this subdued visitation outlook to various factors. “Stagnated” income among the mainland public and a weakened yuan relative to other major global currencies are cited as primary reasons for the cautious optimism. Comparatively, Macau’s situation is relatively better than other Southeast Asian countries, where flight numbers have struggled to recover to even 60% of 2019 levels.
Despite the headwinds, Macau’s gaming industry remains resilient, and efforts to attract new visitors are crucial to its continued recovery. Adapting to changing market dynamics and finding innovative ways to diversify beyond gambling will be key for Macau’s long-term success in attracting a broader range of tourists.
Analyst comment
Positive: Macau Gaming Rebounds 334% in 2023, Analysts Predict Second Year of Recovery
Analyst prediction: The market will continue to grow in 2024, reaching 82% of 2019 levels due to the robust holiday season and recovery efforts.
Macau Casinos Bet on Non-Gambling Developments to Attract Visitors
Analyst prediction: Diversifying resorts with non-gaming projects will attract a wider range of visitors and align with evolving consumer preferences.
Analysts Expect Macau’s Gaming Revenue to Recover to 82% of 2019 Levels in 2024
Analyst prediction: The market will continue to recover in 2024, with an over 30% improvement in casino win, driven by important holidays and increased visitor numbers.
Robust Holiday Season Expected to Boost Macau’s Gaming Industry in 2024
Analyst prediction: Anticipation of increased revenue during major holidays, combined with ongoing recovery efforts, will contribute to the industry’s growth in 2024.
Macau Faces Headwinds in Attracting Visitors, Nomura Analysts Say
Analyst prediction: While challenges in attracting visitors exist, Macau’s gaming industry remains resilient, and efforts to attract new visitors are crucial for its continued recovery. Adapting to changing market dynamics and diversifying beyond gambling are key for long-term success.
