Strong year-over-year growth will continue for a number of months.
December is likely to be another strong month in Macau. We are currently projecting about 50% growth which would exceed November’s YoY growth of approximately 40%. Last year, November’s hold was unusually high and higher than December’s which created a more difficult comparison – 62% in Nov 2009 vs. 48% in Dec 2009.
Not only should December look strong, but Macau will likely generate 30%+ growth through March, even without any sequentially, seasonally adjusted growth. That is, at current run rates of underlying demand, Macau will continue to defy expectations of moderation.
The following chart shows YoY growth for the next twelve months assuming no pick up in demand other than seasonality:
Of course, demand could always fall. It’s hard to imagine a scenario where Mass visitation doesn’t continue to grow. VIP has historically been a roller coaster and recent inflation fighting tactics in China could restrict liquidity. So far we haven’t seen any impact but that is somewhat of a risk. As it looks right now, demand just needs to stay steady to continue the YoY momentum through mid-2011.