Citigroup says 2025 will be a growth year for Macau casinos, spurred by increased tourism.
Macau officials estimate that citywide gross gaming revenue (GGR) will reach MOP240 billion (£23.8 billion/€28.5 billion/$30 billion) in 2025, 11% more than its 2024 forecast of MOP216 billion.
Citigroup analysts say that figure is too modest. George Choi and Timothy Chau predict GGR will reach MOP245 billion, 7% over the government projection. That’s 83% of 2019 levels, when casinos reaped a total of MOP292.46 billion.
The team tied this growth to several factors. Among them: more smart tables on casino floors and the government’s approval of new baccarat side bets.
Macau Business reports that tourism will do its part, with almost 36 million arrivals fuelled by Beijing’s expanded Individual Visitor Scheme (IVS). In May, the central government added eight mainland cities to IVS rolls. Outgoing chief executive Ho Iat Seng hailed the development, saying it would “enhance the city’s capabilities to receive visitors [and] contribute to economic development”.
Ho promised the MSAR “would fully seize the opportunities brought by this favourable measure”.
More heads, more beds
In anticipation of more guests, casino resorts have expanded their occupancy, with an emphasis on luxury suites.
According to the Macau Daily Times, MGM Macau will renovate former VIP junket areas into luxury suites and guest villas. Sands China is expected to add 1,500 luxury suites at the Londoner Macau.
Next year, Galaxy Macau will debut the exclusive Capella boutique hotel with 57 suites and 36 sky villas. And SJM Holdings recently announced it will convert former VIP rooms at Grand Lisboa Palace into luxury accommodations, including “exclusive villas, mansions and suites, further enhancing guest experiences”, said chairwoman Daisy Ho.
As the Citi team acknowledged, “bigger hotel rooms get bigger players” and additional supply will serve the premium mass players who have supplanted VIPs in the gambling mecca.
Stabilising the economy
But tourism growth hangs on consumer sentiment in a still-wobbly Chinese economy, added Jeffries analysts led by Anne Ling.
China’s consumer confidence index reached a near-low of 86 in July. In late September, per the South China Morning Post, Chinese president Xi Jinping ordered “incremental policies” including a cut in interest rates. It fell short of the comprehensive stimulus package investors were hoping for.
“With 70% of [Macau’s] annual visitors from mainland China, the state of economic environment is most important,” the team wrote, according to Seeking Alpha. “2024 has been a tough year in attracting tourists, with visa approvals in other destinations relaxing and air fares normalising. That said, visitor arrivals growth was a respectable 30% year-on-year for 9M24, recovering to 86% of 2019’s level.
“We expect 5% visitor growth in 2025… from 2025 onward, we believe the base effect to normalise. In addition, both gaming and non-gaming infrastructure should continue to attract players and visitors.”
