Fitch Affirms Macau's AA Rating Amid Gaming Recovery Forecasts

Fitch Ratings has recently confirmed Macau's AA long-term foreign currency Issuer Default Rating (IDR), indicating a positive trajectory for the region's gaming industry. Despite the severe setbacks caused by the pandemic, Macau's gaming sector is predicted to bounce back significantly, with Fitch foreseeing a recovery to nearly 80% of its pre-pandemic levels by the end of 2024.

Macau has been granted a "stable" economic outlook by Fitch Ratings, reflecting the region's robust rebound following the pandemic-induced restrictions. The removal of stringent travel measures in early 2023 has catalyzed the revival of Macau's economy, particularly its gaming sector.

January witnessed Macau's gaming revenue surging to MOP19.3bn, marking its second-highest figure since the reopening post-pandemic. Fitch anticipates this positive trend to persist, with gross gaming revenue (GGR) expected to reach approximately 79.5% of 2019 levels by the end of 2024.

The influx of mainland Chinese visitors during the New Year celebrations has significantly contributed to Macau's gaming recovery. The first two months of 2024 have seen a notable increase in gaming revenue, reflecting a 72.7% rise compared to the same period in 2023.

While Macau's gaming industry shows promise, challenges remain. Fluctuations in the Chinese economy and the government's plans to diversify its economy could pose limitations to Macau's gaming growth. Additionally, the VIP segment's slower recovery path and regulatory changes may impact government gaming revenues.

Despite challenges, Macau's recovery trajectory remains optimistic. Las Vegas Sands' substantial revenue growth in the region underscores Macau's potential for future expansion. With continued efforts to boost tourism and non-gaming offerings, Macau aims to establish sustainable sources of growth and solidify its position as a global gaming hub.