Macau Gathering Momentum as GGR Sees 3-Week Increase
The prospect of a strong recovery for the Macau land-based casino sector seems increasingly more likely. This feeling was greatly boosted following the release of key financial performance data for the month of March. In a positive and much-needed trend, the Gross Gaming Revenue has seen a three-week back-to-back rise as casinos begin to mobilize key revenue-generating functions of their respective business.
Casinos in Macau have been battered over the past 12 months, but March 2021 seems to be the month were fortunes are beginning to look brighter, with Gross Gaming Revenue on an upwards surge as customers begin to return to casino venues uninhibited by lockdown measures. ©lifeP/Pixabay
The third increase in Gross Gaming Revenue is relevant and inclusive of the 15th-21st of March. JP Morgan, an investment bank was the first to break the news to the wider financial ecosystem. They have been actively tracking the performance of this sector since the beginning of the pandemic, and this marked shift in fortunes was certainly not glossed over. The investment bank was swift to praise business leaders within the Asian gambling ecosystem for their skillful leadership through the difficult period.
Looking into the figures we can see the magnitude of the recovery. The first 21 days of March saw a total Gross Gaming Revenue haul of $730 million, and according to the newest figures released by JP Morgan, this figure has been climbing week on week since the beginning of March. The upwards trend in financial performance is clearly a huge source of relief and encouragement for an industry that has been plagued by bad fortune over the previous 12 months.
Comparing the performance of the previous month, it is clear that March has been a particularly good month in terms of financial performance. The weekly Gross Gaming Revenue average rose by more than 12%, and the benchmark metric for daily performance also saw a spike of approximately 17.9% compared to February. Looking at the seasonal performance paints the picture for how far still remains to go on this recovery journey, as the overall revenue generated was less than 70% of March 2019.
An Aire of Cautious Optimism in Macau
It seems like a very long time ago since any of Macau’s business leaders had something to cheer about. The recent financial results have planted the seeds of optimism and rekindled hope that this year could be a hugely successful one where the losses of the previous 12 months could be completely compensated for. But the firms at the helm of this recovery are aware that it is too early to tell for sure how 2021 will turn out, full-throttle recovery isn’t expected to begin until mid-summer.
For the casinos in Macau are to make it through this pandemic unscathed then adjusting their strategy and suite of services surely played a great role on this journey. The adaptions that had to take place on an operational level, with heat scanners at the entrance of casinos, to mass testing of employees on a daily basis has proven to be a challenge that this industry met with a measured response.
Given the resilience of the casino industry to survive even the direst situations economically, and always bounce-back, there is a firm expectation that this upwards trend in Gross Gaming Revenue is gathering momentum. If these forecasts are correct with their initial analysis, then April could very well be an even bigger month than March.
Free Flow of People Crucial to Recovery
Within the land-based casino sector there is the inescapable fact that in order for things to recover, the free movement of people is an essential pre-requisite. Without the flow of customers, many of whom will be traveling from abroad, there is very little chance that the casinos will be able to hit the revenue targets so important for their long-term survival. Following months of turmoil and disagreements over the border, China has begun allowing mainlanders into Macau. This will have a positive effect for two reasons. First of all this population bloc represents one of the wealthiest of the entire client-base. Second of all, for China to take this step shows that the proper protection measures in place across Macau are of a standard high-enough for government officials to make the necessary sign-offs.
It is surely going to be an exciting 2nd quarter for the Macau casino sector, with a whole range of new building projects from hotels to live venues, as well as the unveiling of ambitious investment packages to further enhance the recovery push of this important sector within the wider economy.
