Secretary for Economy and Finance of Macau, Lei Wai Nong, asserted in the previous week that he made a promise to shape into a much optimal year for casinos and the city and the promise is reflecting in the city’s comparatively quickly GGR rebounding. 2020 saw Macau getting terribly wounded due to Covid-19, and the condition has improved from there. The only question that can be asked upon the city’s taken the time and given the effort to come back from its critical condition.
Morgan Stanley does not appear to reflect the same effort and enthusiasm, though he has been able to perfectly push down all its previous estimation on the condition this new year can bring upon the company. The financial Moghul’s analyst has plummeted their level of expectations by 10% for 2021.
Analysts on the Topic
The new estimation, which makes itself round to around $23 billion, would be only 65% of what Macau estimated in 2019. Praveen Chowdhury, Thomas Allen, and Gareth Leung believe that the less traffic of VIP and top-level customers are going to impede rebounding efforts in 2021. They also explained that VIP revenue could only hike to 40% of the number it was only a couple of years ago.
The analysts also asserted that VIP would continue to plummet the overall gaming revenue. At the same time, different macroeconomics indicators are showing some changes being seen in the local Chinese agenda and a crackdown on the overseas gambling promotion that is expected to be put into position as of March 1.
The only good news among all these gruesomeness and terror is the attempts of Macau Casino Operators to reduce cost in the previous year are now delivering rewards. The analysts indicated on the operating costs, without estimating taxes, VIP rebates, and all other particular expenses, plummeted by 30% year-on-year. This latest reduced state in outlay is predicted to be the new standard.