Analyst Note| Dan Wasiolek |
Our forecast for a Macao demand recovery starting in November after China’s Communist party convention in October gathered momentum this past weekend, with the region planning to reinstate group and eVisa travel for mainland China (around 70% of prepandemic Macao visits) as early as late October. This would prove to be a material step forward in Macao’s recovery, with near-term targets to at least double visitation from recent levels to 40,000 per day. Given 2019 averaged about 110,000 visits per day, we think achieving this target could translate to Macao gross gaming revenue, or GGR, reaching 40% of prepandemic marks as soon as November. This would align with our 40%-50% level forecast for the final two months of 2022. As a result, we plan to maintain our 2022 Macao industry GGR forecast at low- to mid-20s of 2019’s level. Meanwhile, government leadership set a goal for at least 80,000 daily visits in the medium term, which we believe can equate to industry GGR of more than 70% of 2019’s amount. With the medium term undefined, we think our industry GGR 2023 forecast of about 60% of prepandemic levels with a full recovery toward the end of 2024 is still reachable at this juncture.