Wynn Leads Casino-Stock Rout as China Holiday Spending Drops

Macau casino operators tumbled in US trading Monday after data showed that tourism revenue declined sharply over China’s week-long National Day break as strict Covid rules held travelers back from spending.

Wynn Resorts Ltd. sank 12% for its biggest decline since March 2020, while Las Vegas Sands Corp. slumped 7.6% after tourism revenue fell 26% to 287 billion yuan ($40.3 billion) over the Golden Week holiday from a year ago — that’s almost 56% lower than pre-pandemic levels in 2019. Melco Resorts & Entertainment Ltd. dropped 7.3% and MGM Resorts International dropped 3.9%.

“October Golden Week wasn’t as golden as some had hoped,” JPMorgan analyst DS Kim said in a report. While gross gaming revenue for the first nine days of October was twice September’s run-rate, it’s still only about 15%-20% of pre-Covid figures, he said, citing his own data checks.

Wynn Resorts tumbles with stock on pace for biggest decline since 2020

Citigroup Inc. analysts followed up by slashing their forecast for Macau’s gross gaming revenue in October to 5.5 billion patacas ($680 million) from 7 billion patacas, citing disappointing revenue during the first nine days of this month.

Despite solid National Day Golden Week visitation, a recovery in gross gaming revenue may have been impacted by the recent Covid-19 outbreak in China, they said.

Repeated Covid flare-ups, bleak tourism and entertainment spending data during the nationwide holiday have heightened concerns about an economic recovery in China. The holiday season is usually a peak season for casino operators. The Nasdaq Golden Dragon China Index of Chinese companies listed in the US dropped 5.3%, extending its decline for a fourth day.

Source: https://www.bloomberg.com/news/articles/2022-10-10/wynn-resorts-leads-casino-rout-as-china-holiday-spending-drops?leadSource=uverify%20wall