“Macau 2021 GGR to hit about 50% of 2019 revenues”, Brokerage

Sanford C. Bernstein Ltd estimates that Macau’s Gross Gaming Revenue (GGR) will rebound to about 50% of 2019 revenue, which is also 144% of the 2020 revenues.

Macau’s Gross Gaming Revenues hit over USD36.6 billion (MOP292.42 billion) in 2019, the year before the pandemic disrupted tourism activity in the city.

In a paper published on Tuesday, the institution stated that VIP play would likely be at only 30% of the 2019 level. It expects that the mass categories would perform better in 2021.

The analysts Louis Li, Vitaly Umansky, and Kelsey Zhu, and Louis Li stated that they expected a continuous shift to premium direct and premium mass categories from junket VIP. The shift would further support margin expansion even when the junket VIP weaknesses slow down the total GGR.

This forecast is based mainly on improved travel ties between Macau and China, and Hong Kong. China is currently the only place to arrange a largely quarantine-free travel bubble with Macau, which is a huge step.

Sanford Bernstein, however, expects Macau’s 2022 GGR to reach about 89% of 2019 levels, with mass categories hitting over 100% of 2019. On the other hand, VIP recovery is highly uncertain at this point.

The Bernstein paper further examined the good fortunes of the US-based Las Vegas Sands Corp, which operates Macau’s Sands China Ltd and Marina Bay Sands Ltd in Singapore.

“With 60% Singapore market share and 50 % + earnings before interest, taxation, depreciation and amortization margins, Marina Bay Sands is clearly a cash flow generating branch with high-growth prospects”, they stated.

According to the paper, these long-term prospects were strengthened by the Las Vegas Sands’ $3.3billion expansion scheme, agreed to by the Singapore government.

Also, the Marina Bay Sands reportedly stands to gain significantly from recovery later in 2021 and into 2022 as the state reopens for international travel.