The US credit rating agency Fitch expects Macao’s gaming industry to improve in 2024, underpinned by inbound tourism’s steady recovery.
The tourism influx, Fitch said in a statement, “reinforces our expectation of a recovery in Macao’s gaming sector for the rest of the year, despite the economic headwinds facing China.” It noted that Chinese consumer preferences appeared to have shifted towards service-oriented sectors such as domestic tourism and entertainment, boding well for the SAR.
Fitch forecasts that the Macao’s economy will grow by 15 percent during the year – though has previously said it saw growth “at 17 percent” for 2024. The agency also cautioned that “possible policies to tighten capital outflow from the Chinese mainland” could have a negative impact on gross gaming revenue (GGR) along with broader economic implications.
[See more: Are there too many tourists coming to Macao?]
Fitch has predicted that overall GGR in the fourth quarter would be almost 80 percent of what it was in 2019, the last full year before the pandemic. By then, it’s believed the mass-market segment would be earning more than ever before, and that the VIP segment would be sitting at just under 40 percent of its pre-pandemic value.
“This slower rebound in the VIP segment can be attributable to recent years’ regulatory tightening in China’s treatment of gaming tourism and the broader economic challenges facing China,” Fitch said.
Fitch has given SJM Holdings a BB-/Stable Long-Term Foreign-Currency Issuer Default Rating, the same rating it has given Wynn Resorts. Las Vegas Sands Corp has a BBB-/Stable rating. BB mean expectations of default risk are currently low, while BBB indicates an elevated vulnerability to default risk, according to Fitch’s website.
