As Macau gears up for the Golden Week holiday from October 1 to 7, 2024, the latest data suggests a vibrant period ahead for the city’s gaming and hospitality sectors. Insights from CLSA reveal a promising outlook, marked by increasing hotel bookings and rising room rates.
Strong Hotel Booking Trends
The demand for hotel rooms in Macau is showing impressive strength as the Golden Week approaches. CLSA analysts Jeffrey Kiang and Leo Pan report that 82% of the 34 Macau hotels they monitor are already fully booked for the weekend of October 5 to 6. This high booking rate is a clear indicator of strong demand, underscoring the significance of the upcoming holiday period.
Hotel prices have been trending upward, reflecting the heightened demand. Properties that still have rooms available have increased their rates over the past week. Notable examples include Broadway, Andaz Macau, Studio City Hotel, W Macau, and Sofitel Macau at Ponte 16, which have all adjusted their prices upwards.
Rising Room Rates and Historical Context
The report highlights a notable trend of increasing hotel prices as Golden Week approaches. As of August 30, room rates have risen to US$477, which, while lower than the post-COVID peak of US$624 recorded at the end of August, indicates a steady climb. This aligns with historical trends where hotel prices typically rise through the second and third quarters before the Golden Week.
Historically, hotels allocate a portion of their rooms for promotional purposes during peak periods like Golden Week. As the holiday draws nearer and demand becomes clearer, more rooms are expected to be released to the public in the coming weeks.
Performance by Hotel Brand and Property
The CLSA report provides a detailed breakdown of hotel performance, distinguishing between top performers and those adjusting their rates.
Top Performers
Galaxy and MGM China properties stand out as the most popular, with six out of eight Galaxy hotels and both MGM China properties fully booked since June 1, on a one-week leading basis. This reflects their continued strong appeal to visitors.
Price Adjustments
Conversely, the Grand Lisboa Palace in Cotai has recently reduced its room rates for the Golden Week period. This is a departure from the general trend of rising prices, showcasing a strategic adjustment in response to market conditions.
Sector Outlook and Gaming Revenue Forecast
CLSA’s report extends beyond hotel bookings to the broader gaming sector, where recent trends suggest a stabilizing effect despite regulatory concerns. The 6% month-on-month growth in gross gaming revenue (GGR) for August indicates a positive trend, suggesting that fears regarding the crackdown on illicit money exchange might be overstated.
GGR Forecast Adjustments
For 2024, CLSA has revised its GGR forecast to US$28.4 billion, reflecting a 2% decrease from previous estimates. Similarly, the forecast for 2025 has been adjusted to US$29.6 billion, also a 2% decrease. These adjustments account for anticipated shifts in market conditions and regulatory impacts.
EBITDA Projections
The forecast for sector EBITDA has been adjusted as well. The 2024 estimate is now US$7.9 billion, down by 3% from earlier forecasts, while the 2025 projection is US$8.9 billion, a 4% reduction. These changes reflect increased expected costs, particularly in staffing.
As Macau prepares for the Golden Week, the city’s gaming operators and hospitality industry are poised for a strong performance. The current trends in hotel bookings and room rates, coupled with a stabilizing gaming sector, suggest a positive outlook. Investors and stakeholders should continue to monitor these trends as the holiday season approaches, taking into account the evolving data and market dynamics.