Macau could benefit from potential $15 billion Thai casino market: CLSA

Macau could benefit from the opportunities Thailand offers for the gambling industry, with a casino market worth US$15.1 billion (MOP121.55 billion) in the offing.

According to real estate agency CLSA, the Southeast Asian country could open its first entertainment complex as early as 2029, with a possible 17 percent gambling tax on gross gambling revenues.

“While Chinese tourists are likely to be a major source of Thailand’s post-Covid tourism recovery, we see large differences between Macau and Thailand’s tourism, which could ensure the resilience of Macau’s gambling industry,” wrote analysts Jeffrey Kiang, Naphat Chantaraserekul and Leo Pan.

Visitor profiles, length of stay and origin were mentioned as important distinguishing factors.

The analysts highlighted the “diverse mix of visitors” to the special administrative region, with 90 percent of travelers coming from Hong Kong and mainland China.

As for Thailand, mainland China and India will be seen as “untapped markets given their low travel penetration” at 0.1 to 0.2 percent of the total population.

If the travel penetration rate in both countries were to rise to 1.4 percent, which is equivalent to the penetration rate from China to Macau, this would represent a potential increase of 77 percent and 9.9 times in the number of annual visits to Thailand from China (accounting for 28 percent of total visits in 2019) and India (accounting for 5 percent of total visits in 2019).

Market comparisons

Both Thailand and Macau had a similar figure of 40 million in 2019, before the Covid pandemic.

“However, their visitor profiles differ significantly. Thailand attracts a more international market, with visitors from countries outside China and Hong Kong accounting for 31 percent of total arrivals,” the analysts wrote.

“Visitors stay on average more than a week in Thailand, compared to less than two nights in Macau.”

According to the Thai government, the average length of stay from 2005 to 2019 was 9.3 days.

By subsegment, Asian visitors stayed between 5.5 and 7.8 days; visitors from the Middle East, Oceania, the Americas and Europe stayed between 11.1 and 15.9 days.

However, in terms of per capita expenditure, Thailand’s expenditure was 31 percent lower than Macau’s that year, indicating that Thailand is catering to mass tourism.

Another potential market for Thailand is Hong Kong. It has one of the most significant travel penetration rates to Thailand.

In 2019, a whopping 14.5 percent of the population traveled to Thailand, outperforming South Korea (3.6 percent) and Taiwan (3.3 percent).

Meanwhile, Hong Kong had the highest travel penetration rate to Macau in 2019, at 97.8 percent.

In 2019, the expenditure per visitor in Thailand was THB 5,164, which is approximately equivalent to US$ 140 per person.

This amount was 31 percent lower than the $203 that Macau spent per person in the same year.

Between 2005 and 2019, per capita expenditure in Thailand increased from THB 3,875 to THB 5,164, representing a compound annual growth rate of 2 percent over 14 years.