MACAU FEB VOLUMES WEAKER THAN WE THOUGHT

We’ve got the property by property detail for the month of February and while GGR grew almost 12% YoY, the month benefited from better luck.  VIP hold percentage was approximately 15-20bps higher than last year and 8-10 bps higher than normal.  Normalizing VIP hold in both periods would have reduced YoY growth to 8%.  While 8% is still solid growth remember that CNY occurred in February of this year but in January of last year.  Mass growth was once again strong, up 31% YoY, consistent with recent trends.  Somewhat troubling and potentially related to the China corruption crackdown, VIP volume growth actually fell slightly YoY.   The aforementioned higher hold boosted VIP revenue up 5%.  The favorable CNY calendar shift did aid slots, however, fueling 17% YoY growth.

 

March looks a little dicey to us on the volume side, owing to a difficult Mass comparison and the China corruption crackdown.  However, low hold in March of 2012 makes for an easier VIP revenue comparison.  Our sources in Macau indicate that the Mass floors are off to a sluggish start.  Operators spread their CNY business over the second half of February thus extending the post CNY hangover.

 

February was a good month for the American operators in terms of market share.  Here are some individual takeaways:

 

LVS

  • Solid market share gains above recent trend driven by a big jump in Mass and VIP
  • VIP hold was well below normal, yet VIP volume and revenue market share improved
  • No surprise that LVS led the market in YoY GGR growth including a 76% increase in Mass growth, highest in 4.5 years
  • LVS should continue to be a market share gainer all year long, absent hold issues

WYNN

  • Not surprisingly, Wynn held above normal on VIP which drove most of the market share growth
  • High hold also boosted Wynn into its first GGR growth month since September, albeit only 4%
  • Mass market grew 16%, its highest in a year but VIP volume fell 8% YoY

MPEL

  • MPEL got hit by bad luck with VIP hold at its lowest rate since March 2011
  • Low hold kept GGR growth at only 1% but Mass rev grew 42% and VIP volume managed a 9% gain
  • Assuming normal hold, MPEL would’ve gained share and posted 16% YoY GGR
  • While there is some concern surrounding MPEL’s dip in share, when you open up the hood you realize that they continue to fire on all cylinders

MGM

  • MGM’s market share gain in the month was exclusively driven by high hold
  • Mass share actually fell to its lowest level ever
  • MGM also lost VIP volume share
  • GGR grew 10% but with consistent VIP hold, growth would’ve been only 6% (VIP hold was high last year too) 

GALAXY

  • Galaxy posted a strong month driven in part by high hold
  • Mass grew 57%, the 2nd highest among the operators
  • VIP volume fell 18% YoY, the 7th consecutive monthly decline
  • Despite the big growth, Mass share fell from recent levels as did VIP volume

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