Macau hits all-time high in Lunar New Year tourism, boosting casino prospects

Macau has reported a record influx of tourists during the Lunar New Year holiday, particularly fueled by a surge in travel demand from mainland China, indicating a potentially lucrative month for casinos in the world's largest gambling hub.

The city documented approximately 1.08 million visitor arrivals in the first six days of the week-long holiday that commenced on February 10, based on provisional government data, Bloomberg reported. This reflects a 3.7% increase from the corresponding period in 2019 and stands as the highest figure since at least 2017 when daily data for peak seasons became available.

Mainland Chinese travelers constituted 77% of the total, with visitors from Hong Kong comprising 18%, as per the data. Macau's hotel occupancy rate reached 97% on Monday and Tuesday, reported local media outlet TDM, citing Macau's tourism chief Maria Helena de Senna Fernandes.

The city and its casinos have significantly benefited from a decrease in Chinese overseas travel. Faced with economic challenges, escalating geopolitical tensions, and limited international flight options, mainland Chinese travelers are opting for closer-to-home destinations. This shift has contributed to Macau's recovery from the Covid-induced slowdown in 2022, with gaming revenue witnessing a remarkable surge of over 300% last year.

“Daily visitor arrivals during this holiday are far higher than during the October Golden Week last year,” Angela Hanlee, a senior gaming and hospitality analyst at Bloomberg Intelligence, was quoted as saying in the report. “Gross gaming revenue in February could surpass our previous expectation of $2.5 billion and also be higher than October last year despite this month having fewer days."

The notable increase in visitors also underscores deeper transformations occurring in Macau. The city is strategically pivoting towards non-gambling activities after a Beijing-led crackdown severely impacted its high-rollers sector. Consequently, casinos are becoming more reliant on mass-market tourists who typically spend less than VIPs.

Business insiders’ estimates for February compare with casinos’ 25.4 billion patacas ($3 billion) in takings in the same month of 2019. Gaming revenue was $2.4 billion in January this year. 

A gauge of Macau casino stocks experienced a 12th consecutive day of growth on Friday, marking its best streak since February 2021 and propelling the index to its highest point since October, the report said.