March data discrepancies, good foot traffic over the weekend, and MGM Cotai.
Below are some recent tidings from our contacts in Macau:
Thoughts on the March Data Discrepancies
The data leaks originating from Macau government sources are usually reliable. So what happened in March when 60-80% growth turned into 42%? There are a few theories floating around but we thought that these two were most plausible:
- There is some chatter on the ground that in order to stem any potential Visa restriction tightening, government officials purposefully pumped up market expectations so that the healthy 40+% actual growth came across as disappointing.
- While revenues certainly slowed in the back half of the month, the magnitude implied by the 15 day, 28 day and 31 day mark were quite large and therefore we would have expected to hear at least qualitative evidence of a slowdown in play - which we clearly did not. One explanation is that volumes didn't really change materially over the course of the month but that there was a reversal in luck.
Strong foot traffic in the first week of April
The Ching Ming holiday, which celebrates the oncoming of Spring, just ended and the traffic in Macau has been very solid. Apparently the Venetian had 110K visitors this past Saturday versus an average of 65k. Our contact on the ground believes that strong trends will continue through Golden Week which takes place the first week of May.
MGM Cotai Site
It probably isn't a complete surprise that MGM is working to secure a Cotai site ahead of its IPO. According to our sources, MGM's Cotai site sits directly behind Sands' 5 & 6 and is directly overlooked by City of Dream’s (COD) Hyatt hotel. The road access is good although the location isn't great since it's on the back side of the strip. The block size is almost exactly the same as 5 & 6.
Below is the a map showing the proposed MGM site plus two photos with a view of the current state and its position re: COD and lots 5 and 6.