May Golden Week GGR Likely to be Lower Than CNY Level: Morgan Stanley

MACAU, SAR (April 26, 2024) — Brokerage Morgan Stanley forecasts that gross gaming revenue (GGR) for the upcoming Labour Day Golden Week (GW) will reach MOP800-850 million per day, translating into a recovery to 73-77 per cent of the comparable level in 2019, The Macau News Agency reported today.

According to the research note released on Tuesday by analysts Praveen K Choudhary and Gareth Leung, this figure is also 5-10 per cent lower than that of the last Chinese New Year (CNY) holiday.

Based on the public holiday arrangement on the Chinese mainland, this year’s Labour Day GW spans from 1 to 5 May.

The analysts indicated that due to the shorter duration of May GW compared to the 2024 CNY holiday, there may be a negative impact on April’s GGR.

The April GGR is ‘already seeing pressure from bad weather’ and currently stands at MOP600 million per day, ‘below both seasonality and consensus’.

The research examined the average daily rates (ADR) and occupancy data for 28 hotels in Macau for the upcoming Labour Day holiday. It found out that both ADR and occupancy rates are weaker compared to the figures reported for 2024 CNY GW and 2019 May GW for most hotels in Macau.

Survey results show that MGM China demonstrates better performance than its peers in terms of ADR and occupancy rate, while Sands China’s hotels seem to be experiencing a bigger decline than competitors, partly due to renovations.

The analysts suggest that investors remain selective in the near term, as catalysts are skewed towards negatives. These include weak April GGR and May GW data, as well as negative earnings revisions.

SOURCE: Macau News Agency.