Will Lunar New Year bring a much-needed boost to Macau's gaming industry? Despite a December decline, forecasts point to a strong January and continued recovery in 2025.
Macau's gaming industry is anticipating a strong rebound in January, fueled by the Lunar New Year holiday, despite a slight dip in gross gaming revenue (GGR) in December, according to a recent report by Seaport Research Partners.
Seaport predicts January's GGR will jump by 6.6 percent year-on-year and a substantial 13.3 percent month-on-month. This anticipated surge is attributed to the influx of tourists expected during the Lunar New Year celebrations, a traditionally lucrative period for Macau's casinos.
December's GGR, totaling approximately MOP18.2 billion (US$2.27 billion), painted a different picture. While representing about 80 percent of the comparable 2019 level, it reflected a 2 percent year-over-year decrease and a 1.3 percent month-over-month decline. This performance fell short of Seaport's initial projection of a 5 percent year-on-year increase.
Analyst Vitaly Umansky attributed December's softer performance to two key factors in a Monday report: a sluggish first three weeks and the three-day visit of Chinese President Xi Jinping to Macau. While this may be the case, Umansky noted a significant improvement in the final ten days of the month, with the return of higher-spending customers.
Looking ahead to the first quarter of 2025, Seaport forecasts a 4.2 percent increase year-on-year and a 4 percent rise compared to the previous quarter. This projected growth, while positive, is more modest than the 6.1 percent year-on-year growth seen in the fourth quarter of 2024. Umansky explained that this is due to "more difficult" year-on-year comparisons, as the first quarter of 2024 benefited from higher VIP volumes and hold rates.
The report also provided insights into market segment performance. The mass market demonstrated robust growth last year, reaching approximately 112 percent of 2019 levels. However, the recovery within the mass market was uneven. The base mass segment lagged, achieving only around 80 percent of 2019 levels, while the premium mass segment significantly outperformed, surging to 48 percent above pre-pandemic levels.
In summary, while December presented a minor setback, the Macau gaming industry is optimistic about a strong January performance driven by the Lunar New Year. The differing recovery rates within the mass market highlight evolving consumer behavior and preferences, with the premium mass segment leading the charge. The projected growth for the first quarter of 2025, though moderate, indicates continued recovery and stabilization within the market.
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