Growing visitation on the back of improved infrastructure and the ongoing trend of mass market revenue comprising a greater percentage of GGR has seen investment bank Morgan Stanley increase its 2019 Macau mass revenue growth forecast by 5%, enough to push Macau into the black.
In a research note issued early Wednesday, Morgan Stanley analysts raised their Macau mass revenue predictions for the current year from +2% to +7%, with total GGR estimates subsequently up from a decline of 2% to +1% growth.
“We are incrementally turning more positive – leading macro indicators are suggesting GGR improvement from 2H19,” said analysts Praveen Choudhary, Jeremy An and Thomas Allen.
“Mass revenue should improve with the help of strong visitation: We believe better infrastructure, notably the Hong Kong–Zhuhai–Macau Bridge (HZMB), will drive strong visitation to Macau (Chinese visitation rose 30% in January 2019).
“We believe the quality of visitors from HZMB will improve over time. Authorities are opening the bridge to private cars and taxis while making the immigration process simpler and less time consuming, which should drive mass revenue per capita higher in 2H19.”
Morgan Stanley added that the “resilient mass segment with better margin is contributing a higher proportion of total GGR.”
However, there remain some concerns – primarily as they relate to VIP.
The analysts pointed to Macau’s new casino smoking ban, increased competition across ASEAN, a continued crackdown on illegal underground banking and more folding by midsized junkets as all contributing to a 6% fall in VIP revenue through 2019.