Melco Resorts & Entertainment Chairman and CEO Lawrence Ho believes the prospect of an end to the damaging US-China trade war and subsequent stabilization of the renminbi will provide a positive impact to Macau’s gaming revenue over the next 12 months.
Ho’s comments came during an interview with CNBC over the weekend in which he was quizzed over mixed results for Macau’s casino operators in 2019, with city-wide GGR down 1.8% year-on-year to MOP$246.74 billion.
Although Melco Resorts itself posted a 16% increase in operating revenues and 39% rise in Adjusted EBITDA in 3Q19 on the ramp of Morpheus at City of Dreams, Ho said a slowdown had been evident in Macau this year, stating, “I think on the top line things have been slower and we’re going to have a down year [in 2019] for sure, but … it’s as expected because with the US-China trade war and the renminbi devaluation, it is certainly having an impact on visitation into Macau and more predominantly on how much people spend when here.
“Especially on the higher end of the business, the spend per visit is a little bit lower.”
However, Ho added that he is confident of improved operating conditions for Macau’s operators in 2020.
“I think the key is really in macro-economics and geopolitics. Assuming the US-China trade war, that there will be a phase one resolution to it, I think that will give a lot of confidence to the travelling consumer that there is an end to this thing, [an improved] economy and a stabilization of the renminbi. I think these are all positive impacts for Macau in the coming year.”