Inside Asian Gaming

21 20 Mainland Chinese represented the highest spending visitor group,with per capita expen- diture of MOP3,192, up 3% y-o-y. Meanwhile spending by Hong Kong visitors rose12% y- o-y to MOP1,031.The average length of visitor stay remained stable y-o-y at 1.1 days.Roughly 52%ofvisitorsareday-trippers.Day-tripperson average only spent MOP636 per capita, much lower than overnight visitors (MOP2,241). Around 56% of the visitors surveyed said they had gambled during their stay. DB View: We attribute moderate 1Q spending growth to the persisting Wynn ef- fect, even seven months after its opening, as it continues to pull visitors into Macau. Fur- ther spending impetus was provided by the Grand Lisboa opening in Feb 2007. We be- lieve per capita visitor expenditure may re- main stable in 2Q given the gap in the casino opening pipeline, before picking up again in the summer once both the Crown and Vene- tian commence operations. Over the medium term we expect visi- tor spending should continue to rise as more quality retail space and hotels come on stream. While it may take a long time for Ma- cau to see non-gaming revenue reach any sig- nificant proportion (Las Vegas: 50%), we think the emergence of non-gaming revenue will be an important trend in the development of the city into a real destination resort. 1Q07 GDP accelerating According to official government statistics, 1Q07 real GDP leapt 26% y-o-y toMOP28.5bn (US$3.6bn). This represented the strongest growth rate since 3Q04. However, on a se- quential basis, GDP growth declined margin- ally, down 3% quarter-on-quarter. 1Q07 saw gross gaming receipts deliver record growth of 45% y-o-y on the back of strong visitation (up 21% y-o-y), whilst visitor expenditure re- mained moderate (up 6% y-o-y). DB View: We attribute healthy perfor- mance to the thriving gaming and tourism sector.Macau’s economy is heavily dependant on its gaming industry which generates more than one third of its total GDP. We believe the 1Q growth momentum could have been driven in part by the Grand Lisboa opening coupled with the continuingWynn effect. Looking ahead, we expect the gaming and tourism boom to continue to underpin further economic expansion in Macau.The full casino-resort pipeline including the openings of Crown Macau (2Q07), Venetian (3Q07) and MGM Grand (4Q07) should drive growth.That said, the economy’s overdependence on tour- ism leaves it open to external shocks. www.gaming-exhibition.com www.audiolight-exhibition.com 國際遊樂場設施與遊戲機展覽會 第三屆國際專業音響.燈光暨演出娛樂展 第七屆國際遊戲與娛樂展覽會 For more information, please contact 詳情請聯絡 Coastal International Exhibition Co., Ltd. 海岸國際展覽有限公司 Tel 電話 : (852) 2827 6766 / (86)(20) 8364 2986 Fax 傳真 : (852) 2827 6870 / (86)(20) 8364 2686 Email 電子信箱 : [email protected] Web 網站 : www.coastal.com.hk 27-29/ 2/ 2008 A M U S E M E N T 澳 門 M A C A O International Amusement and Game Machines Expo rd The 3 International Audio, Lighting & Performance Entertainment Expo th The 7 International Gaming & Entertainment Expo TheVenetian Macao 澳門威尼斯人展覽廳 Room 2106, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong 香港灣仔港灣道 26 號華潤大廈 2106 室 覆蓋最全面設備的展會 匯聚遊戲與娛樂的盛會 The Greatest Event of Gaming & Entertainment TheWidest Spectrum of Exhibits Source: DSEC Monthly gaming revenue (yoy change) 80% 60% 40% 20% 0% 4/06 6/06 8/06 10/06 12/06 2/07 4/07 6/07 24% 4% 8% 18% 6% 37% 44% 32% 59% 71% 33% 35% 40% 67% 43% YTD Wynn opened in 9/2006 Source: DSEC Monthly tourist arrivals (mn) 2.3 1.8 1.3 0.8 0.3 -0.2 8/05 11/05 2/06 5/06 8/06 11/06 2/07 5/07 20% 10% 0% -10% Mainland Chinese Others YTD yoy Source: DSEC Quarterly real GDP vs tourist arrival and gaming revenue Real GDP Gaming revenue Tourist arrivals (US$bn) 4.0 3.0 2.0 1.0 0.0 (‘000) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 – 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07