With the latest addition to Cotai 2.0 officially open for business, the countdown is now on to see if Melco-Crown’s Studio City can spark some sort of resurgence for Macau’s gaming industry.
Despite suggestions that the opening of eight new properties in Cotai between 2015 and 2017 might help end the recent downturn, the first of those openings in May – Galaxy Phase II and its sister property Broadway – were described shortly afterwards as “hardly moving the needle”.
Instead, Macau is now facing an 18th straight month of year-on-year gross gaming revenue (GGR) contraction after October’s GGR fell 28 percent year-on-year to MOP$20.1 billion.
While there is no way that the addition of one more new property will suddenly turn it all around, the real hope is that the cumulative impact of these properties will be greater than any offers on their own. In other words, while visitors might not come for one new property, they might come for two with the likelihood of travel progressively increasing as each new property opens its doors.
Realistically though, such growth looms as a long term rather than a short term prospect so it seems unlikely much will change when November’s GGR is revealed in a few weeks’ time.
The year to date GGR (Jan to Oct 2015) totals MOP$196 billion, which is down 35% on last year.
The good news is that there is now some light at the end of the tunnel according to analysts, with Vitaly Umansky from Sanford C Bernstein describing October’s result as “The beginning of a less bad environment” and pointing to the growth in daily revenue from the mass market segment – thanks in part to Studio City’s opening – as a positive sign for the future.
