China's Golden Week Holiday Set to Unleash Gambling Explosion

Deutsche Bank thinks this holiday could be the busiest in four years.

Author:: Kinsey Grant
Publish date:: Sep 21, 2017 9:47 AM EDT

China's Golden Week celebration starting Oct. 1 could be the country's busiest holiday in four years, offering a hearty boost for Macau resorts, Deutsche Bank analyst Karen Tang wrote in a note Thursday, Sept. 21.

Golden Week is a semiannual weeklong holiday that the People's Republic of China implemented in 2000 to expand tourism, improve the national standard of living and allow workers enough time to make long-distance family visits. Three days of paid vacation are given to all Chinese workers during the Golden Week and the surrounding weekends are rearranged to ensure seven days of continuous holiday.

Although September's gross gaming revenue might be slower than usual as a result of lingering impact from deadly Typhoon Hato, Golden Week will draw more visitors than usual to tourist hotspots like Macau, Deutsche Bank said. Macau is the only area in China where gambling is legalized.

Domestic travel within mainland China typically surges during Golden Week, and this season's holiday is no different. Of 18 Macau hotels that Tang surveyed, 11 were booked to capacity for the first five days of Golden Week. Ahead of Golden Week last year, only eight hotels were fully booked.

The Cotai Strip in Macau is particularly popular this year, Tang wrote. Of the seven hotels that are more fully-booked this year than they were last year, six are in Cotai. The popularity of the region could benefit Las Vegas Sands Corp.-owned (LVS) - Get Report Sands China and Galaxy Entertainment Group Ltd. (GXYEY) , which both have locations in the Cotai area.

Given the anticipated traffic boom, Tang reiterated her "buy" rating on Wynn Resorts' (WYNN) - Get Report Wynn Macau and MGM Resorts' (MGM) - Get Report MGM China.

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