August was up a disappointing (at least for us) 40% in Macau. With slowing growth, market share may again be a more important metric. Not good for Wynn.
Frankly, I’m disappointed in Macau’s August performance, not because +40% in and of itself is disappointing, but that mid-month trends indicated a bigger growth rate. We should be getting our proprietary detail by property shortly so we do not yet know whether the second half slowdown was related to hold, volume, or both. We are pretty sure that Wynn’s market share will be low with both hold and volume to blame.
The following chart shows monthly YoY change in total Macau gaming revenues. We’ve also included a line that shows the monthly VIP hold percent since hold variances can drive big moves in revenues.
So what should we expect going forward? On the chart, we’ve put in our estimates for the remaining months of the year and it is clear that we expect growth to slow. Growth will still be solid though. However, we may have to revise our estimates if the 2nd half of August slowdown was volume related. That would be disconcerting. As it stands now, we are projecting recent revenue levels will continue, adjusted for seasonality.
Some may be surprised by our projection of 35% September growth since the month faces a +54% comparison last year. However, September 2008 revenues were ridiculously low at HK$6.9 billion with a low hold percentage. November should be the slowest growing month until we reach 2011, which will present its own challenges.