Inside Asian Gaming

January 2014 | INSIDE ASIAN GAMING 17 Second, Macau is seeing sustained visitation growth, up 4.5% year on year through November. “We expect 7% visitor growth in 2014, driven by infrastructure improvements, extension of the Individual Visit Scheme, Rmb appreciation, and the wealth effect,” said the report. Finally, spending per visitor remains in double figures, which also pushed up mass table yields to 28% in 2012/13 (the 2013 figure is an estimate). The company expects 18% year-on-year growth in mass table yield. Caution Required However, there is also reason to be cautious. The number of hotel rooms is expected to grow by only 3% in 2014, meaning that growth will need to be driven by yield per room per visitor, while similarly, constraints on the overall number of tables mean that revenue per table will need to grow. Ameliorating the latter concern somewhat is the restriction on tour groups from 1st October, 2013, which has seen a decrease in the number of low-quality visitors and has helped to push spending per visitor higher. a shortage of labor could even delay this development; projected demand combined with the tight labor market and requirements such as the ban on non-locals working as dealers could see a shortfall in the thousands. FEATURE Source: CEIC, DICJ, Morgan Stanley Research Mass Revenue per Chinese Visitor Keeps growing VIP Yields to Increase VIP table yield is also set to increase, withdrivers includingaccelerated liquidity and an enlarging mainland customer base; moreover, according to the report, given the 18% year-on-year growth in Q4 2013, 13% for 2014 should not be a stretch. According to the report, further upwards movement could come from VIP growing faster than expected. This will be partially offset by a 2% year-on-year decline in the number of VIP tables as operators gradually move VIP tables to mass, and downside risks remain. Competition from other jurisdictions weighs, while the report also points to the impact of a potential expansion of the smoking ban. Constraints on 2015 Looking further ahead, capacity constraint will remain an issue until the opening of Cotai phase 2 in mid-2015. More seriously, however, Infrastructure development is not expected to be a growth factor in the near term, with the light rail delayed and the Taipa ferry terminal not increasing the amount of mainland tourists. Strong Q4 2013 the Basis “Our revision is based on stronger-than-expected 4Q13 revenue of MOP$110bn, representing growth of 12% quarter on quarter and 24% year on year,” the report stated. Source: CEIC, DICJ, Morgan Stanley Research estimates Labor Shortage Could Delay Cotai Phase 2 Opening In the quarter, 35% of revenue came from the mass segment, representing a gain of 11% quarter on quarter and 34% year on year. A slightly weaker luck factor for the quarter saw VIP revenue grow by 19% year on year versus 21% year-on-year growth for VIP roll. The quarter also saw operators’ EBITDA per table per day converge, most being within the US$5,000-$7,000 range. Source: DICJ, Morgan Stanley Research estimates Macau GGR Grew 24%YoY in 4Q13 No. of persons