Praveen Choudhary, managing director and head of Hong Kong Property, Hong Kong/China Conglomerates and Asia Gaming Research at Morgan Stanley, said on Tuesday it was very difficult for Macau to massively increase its non-gaming revenue per centage due to the city’s limited land resources.
Choudhary made the remarks while speaking to reporters on the sidelines of a press conference at Galaxy Macau about the upcoming 11th G2E Asia gaming expo, where he was one of the main speakers.
Non-gaming revenue accounted for about 13 per cent of the gaming industry’s total revenue in the third quarter of last year, compared to 65 per cent at the Las Vegas Strip in 2015.
“Over the past few years, Macau’s non-gaming revenue has grown from 7 to 13 per cent due to the openings of new casinos,” said Choudhary, who was quick to add: “But the city has little land resources left for more casinos.”
He said that Las Vegas’ non-gaming revenue was able to contribute more than half of its gaming industry’s total revenue because of its abundant land resources which allow companies to open new casinos as long as they think they will be profitable.
“For Macau, a massive growth in the non-gaming revenue would mean a decline in something else, such as the gaming revenue,” Choudhary said, adding that otherwise the rates of hotel rooms would have to increase.
“Mathematically, Macau’s non-gaming revenue can’t go up to 65 per cent [of the gaming industry’s total],” he said.
When asked if he thought that Macau’s gross gaming revenue would go back to its peak level, Choudhary answered with a determined “yes”, saying it could be expected in a few years’ time.
According to a Morgan Stanley research report by Choudhary published last month, the growth outlook for Macau’s gross gaming revenue is 10 per cent for this year, with a higher growth in the mass market than the VIP gaming segment.
The 11th G2E Asia gaming expo is scheduled to take place at the Venetian on May 16-18.
(Macau News / The Macau News Daily)