Macau November 2024 GGR is expected to drop 13.5% to $2.25 billion due to seasonal trends and the Grand Prix, though still up 12.1% YoY, says Bank of America.
Macau’s gaming sector is expected to register a notable decline in gross gaming revenue (GGR) for November 2024, according to recent projections from Bank of America. The anticipated drop of 13.5 percent from October is attributed to seasonal trends and the disruption caused by the Macau Grand Prix. Despite the decline, the overall GGR for November is expected to reach MOP 18 billion ($2.25 billion), which represents a healthy year-on-year increase of 12.1 percent.
While the November figures indicate a dip compared to the prior month, they also reflect a modest recovery when compared to pre-pandemic levels based on the latest investment memo cited by AGBrief. Analysts noted that the expected GGR for November accounts for approximately 78.6 percent of the GGR recorded in the same month of 2019, indicating that the gaming industry in Macau is gradually bouncing back.
The primary factors behind the anticipated month-on-month decrease are seasonality and the ongoing influence of the Macau Grand Prix, a prestigious motorsport event that typically disrupts regular business activity in the region. The GGR for November tends to decline by more than 10 percent compared to October in most years, and this pattern has remained consistent in 2023. In fact, last November, the gaming revenue saw a steeper drop of 17.7 percent.
Scheduled to take place from November 14th to 17th this year, the Macau Grand Prix has historically had a significant impact on casino operations. The four-day event draws large crowds and diverts attention away from the gaming sector, leading to reduced foot traffic and spending at casinos.
However, analysts from Citigroup highlighted that the 71st edition of the Grand Prix will return to a four-day format in 2024, a change from the six-day event held in 2023. This shorter duration is expected to result in less disruption to Macau’s casino operations compared to last year, which could slightly mitigate the overall impact on gaming revenue.
While the month-on-month decrease in GGR is expected, the year-on-year growth is noteworthy. Bank of America’s analysts have pointed out that the Macau gaming sector has shown resilience in the face of broader economic challenges, particularly the ongoing slowdown in consumer spending in China. Despite weaker demand in other consumer sectors across the region, Macau’s gaming revenue has remained relatively stable, with November’s forecasted growth of 12.1 percent year-on-year providing a positive outlook.
The trend of steady recovery is a reflection of Macau’s ability to rebound from the devastating effects of the COVID-19 pandemic, when tourism and gaming revenues plummeted due to global travel restrictions. In comparison to pre-pandemic levels, Macau’s GGR for November 2024 is expected to come close to 2019 levels, suggesting that the territory’s gaming industry is regaining some of its previous strength.
Despite the anticipated slowdown in November, the gaming sector showed impressive performance in October. The month saw Macau’s highest GGR in 57 months, with total revenue growing by 7 percent year-on-year and 20 percent month-on-month, reaching MOP 20.8 billion ($2.5 billion). This strong performance in October has helped boost investor confidence and demonstrated that the gaming industry is capable of bouncing back even amid challenges in the broader economy.
The uptick in October’s GGR can be attributed to a variety of factors, including strong visitor numbers, higher-than-expected spending, and a gradual return to pre-pandemic patterns of tourism and gaming activity. Analysts believe that the strong showing in October will help provide a cushion against the November slowdown, even though the Grand Prix and seasonal trends will exert pressure on the sector.
Looking ahead, analysts from Bank of America and other financial institutions are focusing on the importance of dividend yields in Macau’s gaming sector. With growth expected to be slower in the near term, investors are increasingly seeking stable returns from dividends, rather than relying solely on capital gains.
Galaxy Entertainment, one of Macau’s largest casino operators, is among the companies seen as having a strong outlook due to its solid financial position and consistent market share. The company’s robust balance sheet and ability to generate stable cash flows make it an attractive option for investors seeking reliable income.
Similarly, Sands China, another key player in the Macau gaming market, is expected to see a margin recovery in 2025. This recovery will likely follow the completion of renovations at its Londoner Macao resort, a property that has been undergoing upgrades to enhance its appeal to both tourists and high-rollers. With the potential for a resumption of dividend payments, Sands China is also attracting positive investor sentiment.
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