Macau casinos slowly recovering from COVID pandemic
- Overall 2020 room occupancy down to 28.6% from 90.8%
- Annual revenues fall by 78%
- Gaming revenues at the lowest rate for 14 years
- Signs of recovery in Q4 as pandemic crisis eases
After the devastation of the COVID-19 pandemic, forcing casino businesses to close and tourism to grind to a halt, it’s no surprise to see how operators’ financials took a massive hit.
MGM China Holdings Ltd, the owner of MGM MACAU and MGM COTAI, unveiled its full 2020 results, showing dramatic falls across the board.
But while the drop was substantial, final quarter figures for 2020 show revenues picking up once more.
And with visitors beginning to return in numbers, Macau can be confident of getting more or less back on track in 2021.
2020 hit for Macau Numbers
The unaudited headline figures released by MGM China Holdings show Macau visitors dropped from 39.4 million in 2019 to just 5.9 million last year. As a result, hotel room occupancy rates plunged to 28.6% from a healthy 90.8%.
A plunge in visitors meant gross gaming revenues took a huge hit, falling to the lowest rate for 14 years, down 79%. Revenue was HK$5.1 billion, putting the group into a negative adjusted EBITDA of around HK$1.4 billion.
The results would have been far worse had there not been a gradual recovery in Q4. As the pandemic stabilized in the region, the 14-day quarantine period was lifted for visitors, and tourism visas resumed from August.
Improvements showed the Q4 GGR year-on-year decline was 70% compared to the 93% comparable fall in Q3.
That slow recovery in Q4 allowed both MGM MACAU and MGM COTAI to record positive EBITDA for October through December (HK$247.1 million and HK$120.1 million respectively). The figures were impressive in relation to other Macau resorts, with MGM increasing market share from 9.5% to 9.9% for the year, and 12.6% for Q4.
Recovery will continue through 2021
Hubert Wang, President and Chief Operating Officer of MGM China, said: “We are pleased to see MGM China turned profitable again, driven by strong market share gains and continued cost mitigation efforts.
“We expect the broader rate of business recovery will continue to be gradual, driven by the premium mass market, which both MGM MACAU and MGM COTAI are well-positioned to capture.
“MGM China will continue to invest in strengthening our market position and continue to believe in the long-term success of Macau. We have been committed to supporting Macau as a world tourism destination. We look forward to working with the government through the licensing renewal process in hopes to further our support for many more years to come.”
As a further show of support to the city, MGM China said that the construction of additional suites at MGM COTAI has begun. The new rooms will launch sometime around July this year.
The company was also remodelling and refurbishing parts of both properties and putting on additional food and beverage options on the gaming floors to further improve customer experience.