Macau GGR projected to grow by 28% year-on-year in 2024

Morgan Stanley projects that in 2024, Macau’s gross gaming revenue (GGR) will rise by 28% annually to 80% of pre-COVID levels.

Based on Macau’s strong performance in 2023—when GGR exceeded expectations at MOP$183.1 billion (US$22.7 billion)—the optimistic estimate seems optimistic. In 2024, analysts Praveen Choudhary and Gareth Leung forecast a positive trend, with GGR rising from 62% of 2019 levels to over 80%.

The analysts predicted a good comeback in 2024 based on December’s GGR result of MOP$18.57 billion (US$2.30 billion), which surpassed traditional seasonality. They anticipate a significant increase of around 20% above 2019 levels, supposing a December 30% recovery in VIP gaming (23% in 3Q23).

A flat month-over-month GGR of MOP$18.8 billion, or 75% of pre-COVID levels, is what analysts forecast for January.

In a previous note, Choudhary and Leung forecasted that in 2024, Macau’s concessionaires would have to incur higher operating expenses (OPEX) and capital expenditures (capex) due to mandatory non-gaming investment commitments and pay hikes. They predict that in 2024, Macau’s casino businesses will raise wages by 2% to 3% while keeping the “13th month” compensation incentive in place.

Experts also predict that non-gaming spending will rise in 2024, with a significant portion of committed capital investment coming from companies like Sands. Other operators could have to allocate more capital to operating expenses, which might lower their profit.

Original story by: IAG