Typhoon Mujigae Rains On Macau's Golden Week Parade

  • After a strong start to the Golden Week holidays, Macau visitation numbers were hit hard by the arrival of Typhoon Mujigae.
  • Prior to the typhoon’s landfall, Macau visitation numbers for October were 7.1 percent higher than last October’s numbers.
  • Monthly gross gaming revenue in Macau has declined year-over-year for 16 consecutive months.
  • Just when it seemed like things might finally be looking up in Macau, the world’s largest gambling hub was dealt another heavy blow last week—this time by Mother Nature.

    After Macau visitation numbers during China’s Golden Week holidays started off much stronger than last year’s numbers, the latest reports out of Macau indicate that the landfall of Typhoon Mujigae severely disrupted visitation numbers.

    Strong Start Derailed

    The Golden Week holidays got off to a strong start from October 1–7, when visitation to Macau climbed 7.1 percent higher than last year’s total for the same week.

    However, the tourism boost was derailed by Typhoon Mujigae, the strongest October storm to hit the Chinese mainland since 1949. Since the storm made landfall on October 4, Macau visitation numbers have dropped by 16 percent.

    Related Link: Bernstein Highlights "Strong Performance" In Macau During Golden Week

    Underlying Strength

    Despite the discouraging disruption, investors in Macau gambling resort operators Las Vegas Sands Corp. LVS, MGM Resorts International MGM, Wynn Resorts, Limited WYNN and Melco Crown Entertainment Ltd (ADR) MPEL can take comfort in what the numbers were saying prior to the typhoon.

    “There’s still pent up demand coming into the market, especially over holiday periods,” said Sanford C. Bernstein gaming analyst Vitaly Umansky. “It would be a bad indicator if there were no growth or a decline in visitation.”

    Outlook

    For now, Macau investors will have to wait for the October gaming revenue numbers to see the full impact of Typhoon Mujigae. Monthly gaming revenue in Macau has now fallen year-over-year for 16 consecutive months.

    Disclosure: The author owns shares of Melco Crown Entertainment.

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    Posted In: NewsTravelEventsGeneralcasinogamblinggaming industryGolden WeekMacauSanford C. BernsteinTyphoon MujigaeVitaly Umansky
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