There have been reports of how the ongoing pro-democracy protests in Hong Kong are taking a toll on Macau’s gross gaming revenue (GGR). However, according to the brokerage firm Sanford C Bernstein, the impact of the protests in neighboring Hong Kong is minimal and short term.
The analysts predict the contrary – the Hong Kong protests may actually benefit the casino gambling industry in Macau in the long-run.
Analysts Vitaly Umansky, Eunice Lee, and Kelsey Zhu said that there is no dount that the protests in Hong Kong has caused some “transport disruption and created headwinds to visitation into Hong Kong (and onward visitation into Macau), but we believe the impact from the Hong Kong protests has been minor.”
However, they go on to add that “Although visitors from Hong Kong (as defined by travel documents used when entering Macau) make up on average 17% to 19% based on our conversations with casino operators and junkets, Hong Kong residents make up less than 10% of mass GGR. The bulk of mass GGR and almost all VIP GGR is driven by Chinese players.”
According to the analysts at Bernstein, the dampening revenues in Macau’s casino gambling industry is caused by multiple factors including the slowdown in the Chinese economy, the ongoing US-China trade war, the RMB depreciation, lack of player liquidity, issues with junket operators and more.
“While high end has softened, and lower-end visitation growth remains solid, average spend per room has declined and with a shortage of rooms, growth under such a scenario becomes more constrained,” explained the brokerage company.