Macau and Cambodia – two Asia-Pacific casino markets among the most reliant on Chinese visitors – are both feeling the absence of mainland VIP players, says an S&P Global Inc macro-view report on gaming demand in the region.
Another challenge for the regional casino and tourism industry is that “pent-up demand” among Chinese people for travel, seen immediately after pandemic restrictions were lifted in early 2023, was “likely on a diminishing trend,” said the institution, adding that a “two-speed recovery” was “taking shape across the gaming tables of Asia Pacific”.
More specifically for Macau and Cambodia gaming, “we do not expect GGR [gross gaming revenue] to recover to pre-pandemic levels over the next 12 to 24 months,” wrote analysts Shawn Park, Aras Poon and Tristan Ong.
Though they also observed: “Markets that had limited exposure to junkets – Singapore, Malaysia, Australia, and New Zealand – will likely reach or even surpass pre-pandemic GGR levels.”
But they added that while Macau, with its cultural ties and proximity to the Chinese mainland, was most dependent on Chinese tourists – about 66 percent of its visitor volume in the first-half 2023, versus 30 percent of Cambodia’s visitor volume in the same period – it also had a strong and growing mass market.
While mass GGR in Macau is “already at about 90 percent of 2019 levels,” S&P said it does “not expect VIPs (mostly junkets) to fully recover”. But 온라인카지노사이트 it noted that “VIPs have contributed no more than 10 percent to 15 percent of EBITDA [earnings before interest, taxation, depreciation and amortisation] for the Macau gaming companies in the past.”
The ratings institution said that regarding Cambodia, “the pool of high rollers has shrunk,” adding that “Chinese junkets previously accounted for the bulk of this”.
S&P mentioned specifically, operations at NagaWorld, a large casino resort with a monopoly in Cambodia’s capital Phnom Penh, which is run by Hong Kong-listed NagaCorp Ltd.
The ratings house stated: “Between 2017 and 2019, 70 percent of Naga’s GGR comprised VIPs. With the removal of Chinese junkets, we now expect VIPs (referrals) to contribute less than 10 percent of Naga’s total GGR” annually.
The NagaCorp management outlined at a media briefing in August, following the firm’s interim results, its efforts to boost NagaWorld’s appeal to mass-market players.
For Asia Pacific generally, the institution said it expected Chinese tourists “to take about 12 to 18 months to return to market more meaningfully”.
“Except for Macau”, Chinese visitor volume to other markets “still has a lot of catching-up to do,” suggested the analysts.
“Chinese tourists are showing a growing preference for shorter trips, and are increasingly travelling at home amid the depreciation of [China’s currency] the renminbi and government efforts to stimulate the weak economy by promoting domestic tourism. Travellers also have less appetite for spending, in our view, and pent-up demand is likely on a diminishing trend,” added S&P.
During July and August, China’s border control agencies handled 110 million inbound and outbound trips, averaging 1.78 million per day, and up by 30 percent from the same period last year, according to the country’s National Immigration Administration