Macaus gross gaming revenue will surge back towards 2019 levels by next year and equal the all-time high set in 2013 of around MOP$360.75 billion (US$45.2 billion) by 2025, according to a report by brokerage Bernstein.
The report, which primarily focuses on the outlook for Sands China and its parent Las Vegas Sands as key markets recover from the global COVID-19 pandemic, takes a deep dive into Macaus own short-term future, which includes an anticipated 144% year-on-year increase in GGR in 2021 based on easing border restrictions with mainland China.
While that improvement still leaves the SAR at only around 50% of pre-pandemic (2019) levels, Bernsteins Vitaly Umansky, Kelsey Zhu and Louis Li estimate a recovery to 89% of 2019 GGR in 2022 with mass GGR up more than 100%.
VIP is described as a wildcard although the analysts say a continued shift from junket VIP to premium mass and premium direct will aid operators by supporting further margin expansion.
Notably, Bernstein estimates CGR of 11% from 2022 to 2025, culminating in 2025 GGR improving over 2019 levels by 25%, including a 50% increase in mass. Based on such a scenario, Macau GGR in 2025 would come in somewhere around 2013 levels at MOP$360 billion (US$45 billion).
The analysts also suggest Macaus shift towards a mass-dominated market will benefit Sands China over other operators. Sands contributed 25% of Macau GGR pre-COVID, including 30% of mass.
Sands China will continue to be the mass market and non-gaming leader in Macau, they write. With the upscaling and expansion of the Macau properties, we believe Sands China will maintain its market leading position in Macau with over 1/3 of Mass GGR and deliver +6% EBITDA CAGR (inclusive of the 20-21E downturn) from 2019 to 2025.
While concession uncertainty remains a key perceived risk factor, we firmly expect Sands to be renewed along with the other five Macau operators.
Sands China operates The Venetian Macao, The Londoner Macao, The Parisian Macao, Sands Macao and The Plaza Macao.
Bernstein analysts earlier this week predicted a 50% month-on-month rise in Macau GGR in July after the DICJ reported the citys lowest revenue total of the year in June (MOP$6.54 billion) due to a COVID-19 outbreak in neighboring Guangdong Province.