Macau’s gross gaming revenue fell well short of predictions in September, rising just 2.8% year-on-year to MOP$21.9 billion due to the mid-month impact of Typhoon Mangkhut.
Originally tipped to record revenue growth in the low-to-mid teens, the city’s casinos instead came in considerably below post-typhoon estimates of between 6% and 12%. The poorer than expected result has been attributed to the ongoing effects of Typhoon Mangkhut on travel routes and infrastructure, while the industry suffered its biggest hit at the height of the storm when authorities ordered all 42 of Macau’s casinos closed for a period of 29 hours from 11pm on Saturday 14 September until 4am on Monday 16 September.
According to Union Gaming’s Grant Govertsen, the lasting effects of the storm were considerably more than first thought.
“Our on-the-ground assessment after the typhoon passed was that damage to Macau was very slight and that GGR could be impacted by upwards of 700 bps relative to our initial +14% forecast for the month,” Govertsen said in a Monday note.
“With the benefit of hindsight, and in the context of the damage in Hong Kong being much more severe than in Macau, we believe the period of time that was needed to get casinos back to normal extended well beyond the Monday morning re-openings.”
Despite the storm, September continued a run of 26 consecutive months of GGR growth for Asia’s gaming hub, with 3Q18 up 10.2% and the full year tracking at +15.9% through the first nine months.
Govertsen also paints a rosy picture for the short term, stating that he had spoken with a number of casino operators in recent days and that, “Generally speaking, and the obvious Mangkhut-related slowdown notwithstanding, the outlook on current trends remains quite positive.
“Importantly, all of the operators we have spoken with have confirmed that they have not yet seen any changes in customer behavior (e.g. trip frequency, wallet size), nor are they seeing any material issues or concerns with their junket partners.”
