Macau’s gross gaming revenue is on track to grow by 28% year-on-year in 2024, reaching 80% of pre-COVID levels according to investment bank Morgan Stanley.
In a note following release of Macau’s December 2023 and FY23 revenue results – with GGR exceeding expectations at MOP$183.1 billion (US$22.7 billion) – Morgan Stanley analysts Praveen Choudhary and Gareth Leung said Macau’s strong finish to 2023 bodes well for the year ahead, with GGR tipped to grow from 62% of 2019 levels to around 80%.
December’s GGR figure of MOP$18.57 billion (US$2.30 billion) also accelerated faster than traditional seasonality, which “should bode well for a 2024 recovery.
“If we assume VIP recovery in Dec was 30% of 2019’s level (23% in 3Q23), mass recovery should be ~20% above 2019,” the analysts wrote.
January, they added, would likely see GGR remain flat month-on-month at MOP$18.8 billion, representing 75% of pre-COVID levels.
In a previous note published in December, Choudhary and Leung said they expect both opex and capex of Macau’s concessionaires to increase in 2024, driven by wage hikes and mandatory non-gaming investment commitments.
“We expect Macau gaming companies to follow the Macau government and increase wages by 2% to 3% in 2024,” they wrote, adding that the traditional “13th month” salary bonus would remain in place.
“We also think the opex portion of non-gaming investment, and potential competitions for gaming hosts/sales, could put upward pressure to opex.
“On capex, we think companies will accelerate their non-gaming spend in 2024. Sands has the scale to have 76% of its committed investment in capex while other operators will need to spend more on opex, which could impact their margin.”
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