“Longer term drivers include continued infrastructure enhancements in and around Macau and China’s growing middle class and propensity to travel,” it said in its Eye in the Sky series. “The 2018 forecast’s moderation also takes into account VIP’s more volatile nature. For most operators, VIP represents less than 20% of EBITDA.”
The firm said the outlook takes into account increased table and room inventory, including MGM Cotai, which opened this month and the new Morpheus hotel tower at the City of Dreams due to open in spring. Fitch said the new openings will largely be geared towards the premium mass market.
In terms of risks, Fitch points to the ongoing vulnerability to changes in policy in Mainland China, such as restrictions to cash, or a crackdown on corruption. Revenue in Macau will also be susceptible to macroeconomic conditions in China and increasing competition from other jurisdictions.
“Positive considerations include improving transportation infrastructure in and around Macau and a steady shift toward the more stable mass market.”
Macau’s gross gambling revenue jumped 19.1% in 2017, coming back after three years of declines, though the pace of growth moderated in December.
According to figures from the Gaming Inspection and Coordination Bureau, the cumulative total for the year was US$33.02 billion.
Source: GMB / AG Brief
