The Macau gaming industry is set to make a remarkable comeback, according to Morgan Stanley, which anticipates a significant increase in earnings before interest, tax, depreciation, and amortization (EBITDA) for the second quarter of 2023. Analysts believe the industry is on course to approach pre-Covid levels, demonstrating robust growth and positive momentum.
According to Morgan Stanley analysts Praveen Choudhary, Gareth Leung, and Stephen Grambling, Macau’s EBITDA for the second quarter of 2023 will climb by 46% over the first quarter. This increase is mostly due to a projected 29% increase in the industry’s gross gaming revenue (GGR) over the same time period. Analysts predict Macau’s GGR to reach $4.79 billion by the conclusion of the quarter.
With a series of high-profile events and performances drawing visitors, Macau’s mass gaming business has seen a considerable increase. Analysts expect this upward trend to continue in the future quarter. While Q2 visitation in 2019 was 60% of pre-pandemic levels, it is likely to increase significantly throughout the year. Furthermore, per-visitor expenditure has already surpassed 2019 levels by 50%, aiding the industry’s rebound.
The expected EBITDA of almost $1.65 billion in Q2 2023 is a promising 69% increase over the levels achieved in 2019. Furthermore, industry experts anticipate that this increasing trend will continue, indicating that the Macau gaming business will continue to rise.
Morgan Stanley analysts foresee a stabilization of market shares among operators as the market progressively recovers. Due to their strong success in previous quarters, Wynn Macau and Melco Resorts are poised to take a larger share of the revenue pie. Following the restoration of its building, Wynn Macau witnessed higher revenue, while Melco Resorts benefited from new attractions such as an indoor water park and hosting prominent concerts. However, Sands and Galaxy had difficulties due to incomplete housing facilities, which are anticipated to reopen in Q3 2023.
The recent addition of 200 gaming tables by MGM China under its new 10-year concession deal enables the operator to earn a major market share in the future years. Analysts predict MGM China’s mass market share could reach 13% by 2024, and Q2 numbers may already be tracking at 14% to 15% (up from 16% in Q1). This implies a mass revenue rise of at least 30% over 2019. According to the experts, MGM’s expected 2024 EBITDA might be 30% greater than in 2019, exceeding consensus predictions.
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