Increasing overnight visitation and average visitor spend will drive growth in Macau’s mass market, said Bernstein.
According to a note from the brokerage on Friday, Macau saw a significant change in its visitation breakdown in 2016, with overnight visitors increasing 10 percent year-on-year while day trippers saw a 7 percent decline.
The increase meant that by the end of 2016, overnight visitors were accounting for 51 percent of all visitors, driven by increased hotel room availability and lower hotel costs.
As supply expands with both casino and non-gaming hotel properties coming online, overnight visitation will continue to grow, says the brokerage.
In 2016, Macau saw approximately 31 million visitors. However, while Bernstein estimates that visitation growth through 2020 could grow at 7 percent CAGR to approximately 40 million visitors, it is not exactly increased visitation that will determine mass GGR growth.
According to the brokerage, the elements that will lead to mass market GGR growth is an increase in visitation as well as average gaming spend growth.
“Overnight visitors spending one night in Macau spend over 1.7x more on gaming and non-gaming (excluding transport) than day-trippers, while those staying two nights spend 3.3x more.”
Thus, it is not growth visitation that is essential, but growth in quality visitation, said Bernstein.
“Sustainable growth in Mass is achievable in Macau over the long-run on continued growth in Chinese overnight visitation and increasing Premium Mass.”