HONG KONG -- Casinos operators in Macao enjoyed strong earnings in the first six months of this year as visitor traffic from mainland China picked up.
Market leader Galaxy Entertainment Group reported a net profit jump of 56% from a year earlier to 7.2 billion Hong Kong dollars ($917 million), while second-ranked Sands China logged a 44% increase. SJM Holdings also saw higher revenue and profit.
Chinese President Xi Jinping's frugality campaign had put the brakes on the casino business in Macau. But the market rebounded in 2017. Visitors rose 8% to 16.81 million in the January-June period, with those from mainland China, who account for about 70% of total traffic, jumpting 13%. With more upper-middle-class customers visiting Macau, casinos' gross revenues climbed to the highest in four years in the first half.
Galaxy's revenue from affluent repeat customers, categorized as VIPs, soared 41%, while revenue from regular customers rose 18%. "Trade friction and the economic slowdown will bite in the short term, but leisure and tourism demand will grow over the medium to long term," said Chairman Lui Che Woo, a well-known magnate in Asia. He expressed hope that new infrastructure like the Hong Kong-Zhuhai-Macau Bridge -- the world's longest sea-crossing bridge scheduled to open later this year -- will help boost visitor traffic.
In anticipation of growing tourism demand, Melco Resorts and Entertainment opened a hotel in June. SJM and Galaxy are also developing big resort facilities.
Meanwhile, with Japan having passed legislation to allow casinos inside integrated resorts, Galaxy is looking to set up shop in Japan in collaboration with a Monaco-based casino operator. Melco Resorts is also looking into a Japan launch.
All six of the companies licensed to operate casinos in Macao are listed either on the Hong Kong or U.S. stock market.