Slowing revenue growth could put focus on costs
- Gaming employee wage growth in Macau has accelerated consistently since 2009 and Macau CPI even faster. The government estimates CPI in 2013 to grow at 6%, similar to 2012.
- Indeed, the president of the Macao Hotel Employees Association said that hotel employees are asking for at least a 6% salary increase next year.
- With GGR growth of +30%, costs were not such a glaring concern. With 2013 GGR growth expected to slow into single digits (our estimate is +9%), margin expansion may be limited.
- We are particularly worried about Wynn’s margins since its GGR may only be flat in 2013.
