Macau casino operators ‘to emerge more profitable’

The Macau casino operators are eventually seen as emerging more profitable from the Covid crisis as companies benefit from increased hotel capacity and lower costs.

Morgan Stanley has told investors that the operators are likely to report EBITDA up 15 per cent over 2019 by 2022. The firm noted that “Macau will look and feel different in 2022, when compared to the pre-Covid world,” adding that high-end premium mass services will greet visitors and investors should look beyond reopening.

Morgan Stanley explains its estimates by saying Cotai hotel capacity will be 13 per cent higher by next year, but operating expenses will be four per cent lower. It sees property EBITDA of $11bn and daily operating expenses of $20.6m, four per cent lower than 2019.

During the crisis, operators have cut costs to the bone, resulting in a 31 per cent reduction in expenses in Q4 compared with the same quarter a year earlier. Gaming-related employment was down 10 per cent year on year and Morgan Stanley expects those cuts to be permanent.

Source: Asia Gaming Brief