Why Chinese gamblers influence Macau casinos
Must-know: Key indicators and trends in the casino industry (Part 2 of 12)
Visitation
During the first half of 2014, casino visitors in Macau slowed down. The two main reasons were:
Slower growth in visitation from mainland China—accounts for 69% of all visitors
A decline in visitors from Hong Kong—accounted for 21% of the total visitors as of August 2014
Growth in visitors from mainland China remained at 13% in August 2014 on a year-over-year (or YoY) basis. Macau’s monthly visitors surged over three million in August 2014.
Visitors from the Republic of Korea and Japan increased by 20% and 2%, respectively, in August 2014 on a YoY basis. Visitors from Hong Kong and Taiwan decreased by 2% and 11%. Also, visitors from the U.S. and the United Kingdom increased. Visitors from Australia and Canada decreased.
On average, visitors stayed for one day. Overnight and same-day visitors stayed an average of 1.9 days and 0.2 days, respectively, in August 2014.
High-speed railways expansion
More visitors are coming to Macau from Chinese provinces—more than 20% YoY. This is because of the high-speed railway expansion.
However, a lack of hotel rooms slows the growth potential. This could improve with new resorts opening in 2015 to 2017. The new resorts are expected to more than double Macau’s integrated resort hotel capacity.
Key stocks and exchange-traded funds (or ETFs)
Companies that have operations in Macau include Las Vegas Sands (LVS), Wynn Resorts (WYNN), MGM Resorts (MGM), Melco Crown Entertainment (MPEL), and Galaxy Entertainment.
A good way to get exposure to the leisure industry is to invest in ETFs like the Consumer Discretionary Select Sector SPDR Fund (XLY).
Despite rising visitation, Macau’s gambling revenue is falling. Continue reading the next part in the series to learn more.
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