Macau: Concerns rise over economic impact on Golden Week despite strong hotel bookings

With the Golden Week approaching, the hospitality and gaming industries are preparing for a mix of optimism and caution. While room bookings have shown relative strength, analysts express concerns that broader economic conditions could dampen overall performance during this key holiday period. 

Recent analysis from UBS Group AG indicates that a notable 17 out of 31 monitored hotels have reached full occupancy or become unavailable. This figure surpasses the bookings recorded during Labour Week earlier this year and last October’s Golden Week, providing a glimmer of hope for operators. 

However, hotel prices remain a point of concern, currently sitting 7% lower than those during the first Golden Week of this year, although they have remained steady compared to the same period last year.

Kenneth Feng, executive director of MGM China Holdings, expressed optimism about achieving a high occupancy rate, projecting between 95 and 100 percent across the company’s properties. 

Meanwhile, Hoffman Ma, from Success Universe Group, reported initial occupancy rates of 80 to 90 percent for the first few days of Golden Week at the Ponte 16 casino. Nonetheless, he pointed out that room rates have decreased by approximately 5 to 6 percent compared to the previous October's figures.

UBS analysts predict that daily gross gaming revenue (GGR) during the Golden Week could average between MOP 900 million and MOP 950 million ($112 - 118 million). This forecast aligns with earnings from previous Golden Weeks, buoyed by anticipated concert events and increased visitors from newly eligible IVS cities. 

Despite the promising bookings, analysts from Macquarie Equity Research issued a note suggesting that the quality of visitors may not meet expectations, attributing this concern to the prevailing economic environment. They caution that consumer demand might be weaker during the October 1 to 7 timeframe, leaving operators feeling less optimistic about their prospects.

This apprehension is further supported by findings from a recent survey conducted by the Statistics and Census Service. Retailers specializing in watches and jewelry reported a staggering decline in sales of over 39 percent, while those in the leather goods sector experienced a drop exceeding 32 percent.