On crisis and changes in Macao

I really like the guys from Destination Macau, as they always spice up the news and are obviously always very well informed: too bad that their sub department has not shown the same proficiency in adding the emails of prospective readers... These two pieces are really worth reading. Crisis? What Crisis? Changes? What changes?

October in review – holy moly!
Sorry it took us so long this month to get around to analyzing the October gaming numbers in closer detail. There are some trends that really jump out, as we will try to explain with the attached graphs below.
The first was the jaw-dropping turnover numbers. Who could ever have imagined that SJM would do MOP 90 billion in rolling-chip sales for a month? But far more spectacularly, who could have forecast an 80 per cent month-on-month increase in volumes at the three Sands China properties, pulled by a near-vertical takeoff at the Venetian? This is a group that publicly has shown nothing but disdain for the junkets. And here they are, doing as much in VIP volume as Melco-Crown, on a win-hold percentage that brought in nearly 50 per cent more revenue than their Cotai neighbor!
The second was the performance of a few key properties. StarWorld is obviously going from strength to strength with its junkets. To have won more than MOP1 billion in a month on VIP turnover that was slightly lower than market-leader Wynn's – and higher than either Altira or City of Dreams – is outstanding. However, for Venetian to have gone from VIP turnover of MOP 11.8 billion in September to MOP 28.8 billion in October, and to have held it at 3.47 per cent, is truly miraculous. (And this was on top of the 15 per cent jump on its mass floor win, from MOP 435 million to MOP 504 million).

The third was on the mass floor, where Wynn was able to silence the snipers who had been suggesting recently that perhaps the property needed to do some more advertising. Its month-on-month gain of 34 per cent on mass gaming was by far the fastest of the Big Six. Clocking in at MOP 335 million, it was second only to the Venetian, at MOP 504 million, and double what City of Dreams did on its mass floor. Everyone did well with Golden Week hordes flooding across the Gongbei border, but some clearly did better than others. Sands Macao was still strong, too, showing that the group can handle both the peninsula and Cotai and scotching suggestions that day-trippers prefer the proximity of the peninsula. A 15-minute bus ride to Cotai is worth it if the experience is enthralling.

Last but not least was the win-hold percentages. Both Sands China and Melco-Crown were due for adjustments, as were Wynn and MGM, yet Sands China still managed to keep its win-hold relatively high, and MGM also kept well above our good friend Theo (the theoretical win-hold percentage of 2.85 per cent). Galaxy, on the other hand, is starting to hold better, which augurs well for a group that has been pumping its VIP volumes so strongly recently. And just wait until SJM holds above Theo on a month of MOP 90 billion in turnover.

New Chief is no PR expert
Fernando Chui Sai-on is not Edmund Ho, as we pointed out in last week's e-newsletter. You could see this much from the body language in the photograph of his cabinet that came out this week in local newspapers. He's not a natural in front of the press. This was confirmed a day later by the way he handled the issue of excluding Ho's audit chief from his cabinet, whereby he said it was her decision and she said it was his. It would have been better not to have responded until knowing what she was going to say first, as any PR professional would have advised.
But the new Chief Executive is no fool, either. He has apparently decided to set up a spokesman's office. This is not just an acknowledgment of his need to have one, but a realization that the Macau government really does need one. This will improve transparency and help local and international media do their job better – making his government more accountable and responsive. It is a positive first step for a man who says clean government is his top priority, and we welcome it.
As for the fact that Commissioner of Audit Fatima Choi Mei-lei is the only top official not to keep her place under Chui, well, all we can say is that politics is a contact sport, and there are two sides to this story. Yes, we can see the obvious reason for her not being carried along on the new gravy train, considering she uncovered government largesse and overspending in projects that were Chui's responsibility under the previous cabinet. But we can also turn the question around and ask why she actually uncovered so little during her time in office. The early years of Ao Man Long's misdeeds were characterized by silence from her.
Anyway, the dogs have barked again, but this caravan is on the move. More important will be to see what comes out next week about the commission caps, which are supposed to start on Tuesday but which we hear are likely to be delayed again. Stay tuned.