Protests in Hong Kong and the upcoming December visit by Chinese President Xi Xinping is not likely to have a significant impact on GGR in Macau, according to analysts from Bernstein Research.
Instead, the softness of the economy and GGR sluggishness is due to macro factors, including the U.S.-China trade war, a soft Chinese economy, RMB depreciation, lack of player liquidity, noise around Macau junket Suncity.
Bernstein said the tightness in hotel room supply is also a factor that has been constraining GGR growth.
“Along these lines, while softness in Macau gaming will likely remain for the rest of the year, it is likely due to a continuation of above factors impacting high-end gaming during the year. Aside from maybe the week or so surrounding Xi's being in Macau, there should not be any real impact specifically from his visit,” said the brokerage.
Bernstein said it expects the rest of 2019 to remain tough for GGR growth as VIP and high-end mass continue to face headwinds.
The brokerage estimates GGR to be -4 percent in 19Q3, and -5 percent in 19Q4, due mainly to a forecasted double-digit decline in VIP GGR. Mass GGR, however, is expected to rise in single to double digits for the remainder of the year.
“Over the short term, the China slowdown and trade war headwinds will continue to weigh on GGR. However, in the long run, improvements in transportation infrastructure, continued growth of the premium consuming class in China and new capacity will support long-term growth in Mass – the execution of a supply-driven market,” said Bernstein.
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