Staying positive

Wells Fargo analysts predict single-digit growth in the MSAR’s gross gaming revenues of 5 per cent to 11 per cent as the market stabilises.
With October average daily revenues reaching MOP704 million (US$88.1 million) per day and 8.8 per cent year-on-year growth in gross gaming revenues for the month, Wells Fargo expects November average daily revenues (ADR) to follow historical seasonality with an in-store ADR month-to-month decrease of 14 per cent.
With regard to the new integrated resorts opened in Cotai – The Parisian Macao and Wynn Palace – Wells Fargo analysts still consider the third quarter results to be insufficient to assess the properties’ potential; stating, however, that Wynn Palace is ‘clearly being impacted by construction’ while The Parisian Macao is ‘benefiting from high-margin walk-in traffic’.

Investment safe
The analyst firm also considers proposed changes to anti-money laundering, increased junket regulations and stricter regulations on large money flows to and from Macau will ‘have positive implications in attracting investment’. The Asia Pacific Group on Money Laundering is set to conduct its audit on Macau’s anti-money laundering and fiscal measures at the end of this month.
Last week the Macau Executive Council proposed changes to two anti-money laundering laws from 2006 in order to widen the scope of identifiable money laundering offences and prevention of terrorism financing. The proposed changes will be debated at the Legislative Assembly (AL) prior to potential implementation.
Wells Fargo also indicated that mass market revenues will improve through better infrastructure, additional hotel room offers on the Cotai Strip and improvements in gaming table technology.

Cheaper hotel rooms
In terms of hotel room offerings, Wells Fargo data stated that new supply has led to more ‘pressure’ on room rates, with room rate averages having decreased 14.2 per cent year-on-year in October from HK$1,696 to HK$1,455, and predicting November will suffer a 15.4 per cent decrease year-on-year from HK$1,534 to HK$1,297.
Analysed by gaming operators, the firm predicts November will see average room rates from, Melco Crown Entertainment Ltd., Sands China Ltd., Wynn Macau Ltd. and MGM Grand Macau properties decrease year-on-year by 38.2 per cent to HK$1,387; 20.8 per cent to HK$1,122; 18.9 per cent to HK$1,878 and 7.9 per cent to HK$1,838. However, Galaxy Entertainment Group properties were estimated to increase in November by 2.1 per cent year-on-year to HK$1,321.