Macau Continues Rapid Revenue Expansion
This notes another incredible month of growth for the former Portuguese colony, the only place in China where casino gaming is legal.Revenues got a major boost in October from the massive casino floor expansion at the Sands Macau on August 24th, the much-anticipated opening of Wynn Macau on September 6th, the opening of Galaxy’s StarWorld on October 6th, and the 19.6% visitation growth during the month. Given the added capacity and the occurrence of Golden Week, expectations were high for October, but seem to have been met or exceeded.
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Visitation to Macau is also rapidly increasing, up 19.6% in October alone. Most of the increase was coming from guests arriving from Mainland China (53% of visitors), which is an up 10.3% monthly increase. Hong Kong visitation was up 36.7%, Southeast Asia visitation was up 108.4%, while Taiwan visitation was down 1.1%. Other visitation, including Europe and North America, climbed 29.0%. Overnight visitation was up 12.1% in September (most recent available figures).
Game revenues include a more than 60 percent increase in slot machine revenues, a 20 percent increase in roulette and a 6.5 percent increase in blackjack take.
At the end of the 3Q06, approximately 2,440 tables and 5,165 slot machines were in use in the Macau market. Following Galaxy’s StarWorld opening in early October, capacity increased to roughly 2,700 tables and 5,600 slots. There is expected to be some additional capacity additions next year with properties such as Fisherman’s Wharf, Greek Mythology, and Pier 16 open or expand. In early November, Las Vegas Sands announced a significant increase in the planned capacity at its Cotai Strip developments.
And because the region’s gaming business is growing by leaps and bounds CHINA'S civil aviation authority is in the process of adding 37 direct flights from 20 mainland cities to Macau beginning in 2007. The cities include Changchun, Taiyuan, Hefei, Luoyang, Yantai, Beihai, Zhanjiang and Weihai. There will be a total of 57 cities Chinese cities from which citizens will be able to get to Macau either directly or via a flight transfer.
Also, an additional 14 flights per week will be added between Macau and Beijing, Shanghai, Guangzhou, Chendu, Kunming and Dalian, starting in the summer of 2007.
To meet this demand and additional demand from other markets the airport will also go through a major expansion project beginning next year. The airport is expected to handle more than five million passengers this year, which is getting close to yearly capacity of six million.
According to secretary of state for Transport and Public Works, Ao Man Long, during a press conference this week, the expansion would include not only adding terminal space to handle additional aircraft, but an area for private flights will also be expanded. Additionally, new parking facilities will be added to the 11 year old airport.
A new airline is also set to debut next week on the 16th. Viva Macau, a low cost regional air carrier headquartered in Macau, will launch with a flight to Phuket, in Southern Thailand.
Airline CEO Andrew Pyne said that Jakarta would be the company’s second destination and that on December 21 flights would begin to Male, the capital of the Maldives. He said Ho Chi Min City in Vietnam would also begin later this month. Next year, the company expects to launch routes from Macau to Japan, Australia, the Middle East and India. Viva Macau, which has two Boeing aircraft – one 767-200ER and one 7767-300 – with a respective capacity of 208 and 245 passengers, offers two classes – Super Star and Star.
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