The Cotai district of Macau, often compared to Las Vegas for its large-scale casino resorts, has generated 61.4 per cent of the city’s gross gaming revenue (GGR) for the fourth quarter of 2017. This is a rise of 15.9 per cent from the first quarter of 2014, which indicates steady improvement in the earnings of the casinos along the famous Cotai Strip, reports GGRAsia.
Cotai’s increased share of the total casino revenue in Macau does not come as a surprise considering the continuous development of new casino resorts in the area. Moreover, there has been an 11.3 per cent increase in the number of four- and five-star hotel rooms in the autonomous territory during the same period. The luxury hotel rooms within the Cotai district account for 58.3 per cent of this, which in actual numbers is 21,200 rooms. In comparison, during the first quarter of 2014, the high-end hotel room segment in Cotai was less than a half of the total for Macau, or 47 per cent.
Cotai, which was intended specifically for casino development as part of a large land reclamation project, is now meeting the expectations with a constantly rising share of Macau’s gaming industry. These statistics, the news website GGRAsia writes, were cited at investor presentation by one of the large casino developers in the Chinese territory, Melco Resorts and Entertainment Ltd., and derive from official data by the Gaming Inspection and Coordination Bureau, as well as filings from six Macau casino operators, including Melco Resorts and Entertainment Ltd.
The data was uploaded Friday on the company’s website and it also shows that during that same period, Cotai’s share of the mass-market GGR of Macau has also risen – from 51.3 per cent in Q1 of 2014 to 64.2 per cent in Q4 of 2017. Last year, mass gaming accounted for only 43.3 per cent of the gross gaming revenue generated from games of fortune, while more than half of the revenues were earned in VIP games.
Future Growth for Macau Seen in Mass Market
Many casinos in Macau, including those on the Cotai Strip, target high-rollers with exclusive gaming rooms, five-star accommodation, luxury retail outlets, and VIP baccarat, which is, in fact, the game that has generated the highest gross revenue in 2017. Despite the strong VIP market in Asia, however, the number of high-rollers that would visit Macau is not infinite and even with its high volume, the luxury gambling market generates low profits due to the benefits and amenities that need to be provided for VIP players.
The mass-consumer segment, on the other hand, has the potential to contribute to an even more impressive growth of the gambling industry in Macau. Tourists and casual gamblers are easier to attract and unlike VIP guests, who enjoy various complimentary services, they spend more money on entertainment, food, shopping, and accommodation.
In addition, more markets are opening, including Japan which expects large-scale casino resorts to be developed in the near future. And while casinos on the Cotai Strip and in Macau, as a whole, are attracting mostly Chinese visitors, Japan’s upcoming properties will target foreign gamblers – both mass tourists and VIP gamblers.