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Visitors flooding into Macau raise Golden Week hopes for casinos
THERE'S a ray of hope in the gloomy outlook for Macau casinos. Early numbers are showing a healthy stream of visitors into the world's biggest gambling hub during Golden Week, helping to alleviate investor fears that the holiday will be a major disappointment.
Chinese visitor arrivals in Macau for Oct 1-2 jumped 27 per cent from a year earlier, according to data from the Macau Government Tourist Office. That's the best two-day start to Golden Week in at least six years.
The Bloomberg Intelligence gauge of Macau casino stocks rebounded as much as 2.5 per cent on Wednesday, with Sands China Ltd and MGM China Holdings Ltd increasing more than 3.5 per cent.
The benchmark gauge has slumped 36 per cent since May amid a parade of bad news for the industry. It slipped 2.8 per cent on Tuesday after data showed that Macau's gross gaming revenue rose at the slowest pace in two years last month, weighed down by Typhoon Mangkhut that temporarily shut casinos and a pullback by high-stakes bettors.
With a slowing Chinese economy and trade tensions with the US contributing to softening gaming revenue growth since the second quarter, expectations for Golden Week have been muted.
Weak pre-holiday hotel bookings haven't helped sentiment. The surprisingly strong visitor numbers may restore some faith in the industry's resiliency after 26 straight months of revenue gains in Macau.
"Positive drivers for Macau's Golden Week include the fact that Macau and Hong Kong still have the greatest appeal given better connectivity, ease of access and milder weather conditions," said Bloomberg Intelligence analyst Margaret Huang.
She expects Macau's gaming revenue for all of October could surpass 28 billion patacas (S$4.8 billion) for the first time since 2014. BLOOMBERG