Rising scrutiny, transaction limits and other KYC measures relating to UnionPay card use may pose a risk for Macau’s premium mass segment, according to Morgan Stanley’s AlphaWise survey.
“Dependence on UnionPay cards for cash remained high and increased compared to the last two surveys. With facial recognition, transaction limits, and rising scrutiny, there is increased risk for this segment.”
That being said, the brokerage noted a rising penetration of the mass market, and says more will likely travel to other overseas destinations, including Las Vegas, Singapore and Australia over the next 12 months.
The AlphaWise survey also found that visitation from Mainland China to Macau, while it doubled from 2015 to 2017, remains low.
According to the survey, the number of unique Chinese visitors to Macau rose from 4.7 million in 2015 to 8.7 million in 2017, a CAGR of ~40 percent.
“Growth came mainly from the grind mass segment. However, overall frequency of visits has gone down from 4.4 times per year in 2015 to 2.5 in 2017, potentially owing to regional competition and rising outbound tourism.”
“This is consistent with a falling number of Chinese daytrippers and more overnight visitors coming on lower hotel room rates (shift towards grind mass),” said the brokerage.
Morgan Stanley says it expects more Chinese customers intend to visit and gamble overseas in the next 12 months.
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