Casinos in Macau Survive One of the Worst Typhoon Seasons Ever
While it was being speculated that the third quarter revenues for the casinos in Macau would be sufficiently impacted in the wake of the multiple typhoons that hit the mainland, analysts have revealed the good news of the setbacks being negligible to the world’s largest gambling hub.
On the 23rd of last month, a typhoon named Hato struck Macau with tempestuous winds and lashed across the city rendering tremendous damage to life with a total of 10 reported casualties, and disrupting the city’s water and electricity supplies. Hato was the first among a series of typhoons that were soon to follow, and recorded the intensity of signal number 10. The number 10 intensity is also the strongest ever typhoon recorded in the past 53 years in the city of Macau. Hato was closely followed by Pakhar that whirled across the city albeit with little damage as compared to the former.
In the wake of the typhoons, some of the casino facilities issued a partial closure of their operations, prompting the casino analysts to downsize their quarter revenue predictions for the gambling industry in the former Portuguese colony of Macau. According to the estimates laid out by the CIMB, the average figures for the daily revenue after the typhoon hit the mainland were recorded at a 15 to 30 percent drop (540 to 655 million patacas) as compared to the pre-storm forecasts.
As stated by Jensen Poon and Michael Ting, analysts based in Singapore’s CIMB Securities, the typhoon warnings also prompted some of the tour groups to cancel or delay their trips for junket players to the next month. The reckless cancellation of player tours and partial closures of casino operations along with the increasing maintenance and operational costs implied that the third quarter margins were likely to be lower than forecasted.
However, the actual situation in Macau casino’s painted a better picture than what was speculated. According to an equity analyst at Morgan Stanley, Praveen Choudhary, although a number of tables had been closed for operation around the city casinos, the ones that did take bets were completely occupied and suggested higher demand to supply. In addition to this, a majority of the casinos managed to resume their water and power supply almost immediately. That being said the official figures for the third quarter displayed a remarkable 22.65 billion patacas, a figure least expected in such tumultuous times.