Macau GGR to grow 8% in 2020, both mass and VIP to show gains: Bernstein

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Macau’s casino operators are tipped to enjoy annual growth in gross gaming revenue (GGR) of around 8% in 2020, buoyed by an acceleration towards the back end of the year and positive momentum in both the mass and VIP segments.

The estimates will come as a welcome relief following declining revenues through 2019, including a year-on-year fall of 13.7% in December to MOP$22.84 billion – the second lowest total of the year in real money terms.

According to Bernstein’s Vitaly Umansky, Kelsey Zhu and Eunice Lee, Macau’s GGR will turn positive again this year, with flat revenues through the first quarter rising to growth of +3% in the 2Q, +13% in 3Q and +15% in the final quarter.

In a Wednesday note, Bernstein said the positive momentum will be aided at the mass market level by an increase in hotel room capacity from both Sands Chinavia the opening of two new hotel Suite Towers at Four Seasons and Londoner, and at Londoner Hotel, and from Wynn Encore’s own completed room renovations.

“Continued infrastructure development in and around Macau will also continue to support further visitation and mass GGR growth,” the note said, estimating mass growth of 9% year-on-year.

Notably, Bernstein is also tipping 6% growth in VIP due to an improving Chinese economy, easing liquidity issues, a more stable RMB and trade talks between the US and China.

According to the analysts, “the prime beneficiary of VIP recovery would be Wynn Macau, which is our top pick in the sector.

“VIP recovery coupled with the Wynn Peninsula renovations and the opening of the Light Rapid Transit (along with more critical mass on the west side of Cotai increases foot traffic at Wynn Palace) drives positive 2020 outlook for Wynn.”