The average daily rates (ADRs) of Macau’s high-end hotel rooms during the upcoming May Golden Week holiday are tracking 14% lower than January’s Chinese New Year and 2% lower than a year ago, suggesting a weaker holiday period ahead, according to investment bank Morgan Stanley.
The comparison relates to 28 hotels located within the city’s integrated resorts.
Morgan Stanley analysts Praveen Choudhary and Dan Chee said the early signs suggest May’s Golden Week could underwhelm which in turn could drive 2025 earnings revisions even lower.
Occupancy rates provide a more clouded picture, however, down 5% versus Chinese New Year but 4% higher than the same time in 2024.
Either way, the forecast isn’t going to move the needle for investors who continue to be wary of the Macau gaming sector given the lack of any meaningful catalysts.
While Macau has enjoyed a solid post-COVID recovery over the past two years, GGR growth appears to have stalled in recent months as macro headwinds – namely China’s slowing economy and the US-Sino trade war – present ongoing challenges.
In a separate note, Morgan Stanley maintained that investor sentiment is unlikely to change until base mass – which has been much slower to recover than premium mass – returns in force.
“Post-COVID, Macau has been dependent on premium mass, which is not only a low-margin business but also drives competition and higher reinvestment rate,” the analysts wrote.
“Investors have been waiting for base mass to come and help margins.”
