Visa clampdown may deal severe blow to revenues

A recent conference call with UBS Hong Kong analyst, Grant Chum warned that Macau gaming revenues are not driven by all of mainland China, but largely driven by Guangdong and Hong Kong visitors which could deal a heavy blow to future gaming revenues.

“We estimate roughly 80 – 85 per cent of mainland visitors to Macau reside in the Guangdong province. Given that the best casino customers are frequent repeat visitors, the visa impact could be more severe on revenues than visitor arrivals,” a UBS report stated.

The UBS report also said that it was “impressed” by Crown Macau’s VIP amenities while its mass business seemed “lackluster”. VIP ramp-up would continue to suffer, the report added, since just 60 hotel rooms are open for business. Meanwhile, Melco-PBL’s City of Dreams project now has US$3 billion to work with, up from US$2.15 billion.