Recovery Taking Longer than Expected for Macau Casinos
Morgan Stanley (NYSE: MS) have added to the woes of the Macau casino industry by casting doubts about the future profitability of the casino industry and their ability to recover from the pandemic.
According to reposts coming from Asian Gaming, Morgan Stanley have lowered their earnings before tax forecast by a staggering 69%, from $2.8 billion to $867 million.
This forecast comes only four months after Morgan Stanley last lowered the earning expectations for the forty-one casinos in Macau, despite the fact that recovery was looking likely.
It is looking more and more like the Macau economy will not be improving as quickly as it was initially hoped, which is understandably causing concern for Macau casino operators and residents alike.
The gloomy Morgan Stanley news was released in a statement by their respected gaming analysts, Gareth Leung, Thomas Allen, and Praveen Choudary, “We are confident about pent up demand, which should eventually drive future mass revenues to be higher than in 2019 based on China’s retail sales and Vegas gaming revenues. But, with a zero-tolerance policy, lower efficacy for certain vaccinations, and the ‘delta variant’, recovery could be months or years away.”
The analysts used an official filing to hammer home the point that they expect visitation level to Macau casinos to be 75% down on the levels experienced before the pandemic, and as explained in their statement, they don’t expect things to improve any time soon!
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