Typhoon Mujigae Rains On Macau's Golden Week Parade

Just when it seemed like things might finally be looking up in Macau, the world’s largest gambling hub was dealt another heavy blow last week—this time by Mother Nature.

After Macau visitation numbers during China’s Golden Week holidays started off much stronger than last year’s numbers, the latest reports out of Macau indicate that the landfall of Typhoon Mujigae severely disrupted visitation numbers.

Strong Start Derailed

The Golden Week holidays got off to a strong start from October 1–7, when visitation to Macau climbed 7.1 percent higher than last year’s total for the same week.

However, the tourism boost was derailed by Typhoon Mujigae, the strongest October storm to hit the Chinese mainland since 1949. Since the storm made landfall on October 4, Macau visitation numbers have dropped by 16 percent.

Related Link: Bernstein Highlights "Strong Performance" In Macau During Golden Week

Underlying Strength

Despite the discouraging disruption, investors in Macau gambling resort operators Las Vegas Sands Corp. (NYSE: LVS), MGM Resorts International (NYSE: MGM), Wynn Resorts, Limited (NASDAQ: WYNN) and Melco Crown Entertainment Ltd (ADR) (NASDAQ: MPEL) can take comfort in what the numbers were saying prior to the typhoon.

“There’s still pent up demand coming into the market, especially over holiday periods,” said Sanford C. Bernstein gaming analyst Vitaly Umansky. “It would be a bad indicator if there were no growth or a decline in visitation.”

Outlook

For now, Macau investors will have to wait for the October gaming revenue numbers to see the full impact of Typhoon Mujigae. Monthly gaming revenue in Macau has now fallen year-over-year for 16 consecutive months.

Disclosure: The author owns shares of Melco Crown Entertainment.

Image Credit: Public Domain