Despite a slowdown in China, CBRE Equity Research remains confident that the pent-up demand for leisure, travel, and entertainment in the region will persist and propel Macau’s recovery.
Despite a slower pace of recovery in May, analysts John DeCree and Max Marsh maintain a positive outlook for Macau’s future sequential growth in the coming months and quarters. The expansion of travel capacity in Macau, coupled with the opening of more hotels and amenities, is expected to contribute to the ongoing recovery.
While concerns over a potential economic slowdown in China led to a decline in gaming stocks in May, CBRE’s research team believes that Macau’s recovery can withstand such challenges. They anticipate that the trajectory of earnings before interest, taxes, depreciation, and amortization (EBITDA) will accelerate at a faster rate than gross gaming revenue, driven by a higher proportion of the mass market and cost-saving measures.
Macau’s gross gaming revenue (GGR) for May reached MOP15.57bn (US$1.93bn), reflecting a significant increase of 365.9% compared to the same period last year. This figure represents a 60% recovery compared to May 2019, indicating a slight deceleration from April’s 62% recovery.
In the first five months of the year, Macau accumulated a GGR of MOP64.93bn (US$9.71bn), marking a yearly increase of 172.9%. Moody’s predicts that Macau’s GGR for the year will reach approximately MOP131.6bn (US$16.31bn), accounting for 45% of the 2019 levels.