With Chinese consumers turning more prudent under an economic slowdown and an anti-corruption campaign, the gaming industry in the region feels partially the pinch of China austerity cure.
Macau, Asia’s capital of gambling and games, has recorded its 17th straight month of declining gamins revenues. The Southern Chinese city has seen its revenues plunging by 35% in October…
The contagion is spreading across Asia. In Singapore, the latest trends report of bank USB mentioned about a potential decline of 11% in GGR (Gross Gaming Revenue) for the year 2015; In its note, UBS analyst Robin Farley highlights the fact that gaming are affected by the weakening of the VIP gaming market. The latter is expected to decline 26% in 2015.
The Philippines gaming market is also on a declining trend, according to First Metro Investment Corp. (FMIC), the investment arm of George Ty-led Metro Bank Group.
In its report, FMIC said that Philippines casino and hotel operators have seen their share declining as there is ongoing concern over the Chinese and the VIP gaming market, following Macau trends. “Listed Philippine casino and hotel operators have seen their share prices decline by more than 50 percent year-to-date despite consolidated gross gaming revenues in the country increasing by a fifth in 2015,” the report highlights. The Philippines gaming market is also affected by political disputes between the country and China over territories’ issues in the South China Sea.
Bloomberry used to get 25% of its GGR from China, while Melco Crown (Philippines) Resorts Corp. (MCP) has been working with its sister company in Macau. Bloomberry has switched by targeting more the local market, which however brings lower revenues. This translated for the company by disappointing first-half results with a net loss as Bloomberry Resorts had also to cover the costs of opening the nex Sly Tower at its Solaire property. Melco Crown (Philippines) Resorts, on the other hand, also suffered losses due to the ramp-up stage of the City of Dreams Manila.
The slump would not laast for too long in the Philippines with local operators remaining optimistic over 2016. Both Bloomberry and Melco Crown expect to turn a profit next year due to rising revenues from gaming and non-gaming activities. “Both gaming and retail operations will be in full blast next year so a revenue boost is anticipated,” FMIC said.
(Source picture: AP Photo/Bullit Marquez)