Macau, the world’s premier gaming hub, experienced an unexpected decline in gross gaming revenue (GGR) in December 2024, coinciding with Chinese President Xi Jinping’s visit. This marked Xi’s first trip to Macau since 2019 and was significant for its timing and impact on the gaming industry’s recovery trajectory.

Xi Jinping’s visit and its context

Xi’s visit to Macau between December 18-20, 2024, celebrated the 25th anniversary of Macau’s handover from Portugal to China. During his visit, Xi presided over the inauguration of Sam Hou Fai as the new Chief Executive, succeeding Ho Iat-Seng.

The visit, however, coincided with tighter security measures and subdued activity in the city’s gaming sector. Industry observers noted that the presence of Xi, coupled with his administration’s ongoing anti-corruption drive, deterred high-rolling VIP gamblers, a cornerstone of Macau’s gaming revenue.

Macau’s GGR: Pre-pandemic vs. post-pandemic performance

In December 2024, Macau’s GGR reached MOP18.2 billion (£1.84 billion/€2.22 billion/$2.3 billion), a 2 percent shortfall from analysts’ median estimates and 20 percent lower than December 2019’s peak of MOP292.5 billion. Despite this dip, total GGR for 2024 was MOP226.8 billion, marking a 23.9 percent year-on-year increase, though still trailing pre-pandemic levels.

Before the pandemic, Macau’s gaming industry reached unprecedented heights, with 2019’s GGR of MOP292.5 billion representing the zenith of the city’s gaming-driven economy. The pandemic, however, brought a drastic downturn as travel restrictions and health measures decimated tourism and gaming activity.

The reopening of Macau’s borders in January 2023 catalysed a steady recovery. By 2024, the SAR achieved approximately 78 percent of its pre-pandemic GGR, fuelled by a resurgence in mass gaming and improved visitation numbers.

Projections and industry sentiment

Despite the December setback, analysts remain optimistic about Macau’s gaming industry.

• JP Morgan Securities highlighted a “solid recovery” in visitation and mass gaming, noting resilience despite broader economic headwinds.

• Goldman Sachs forecasts an 8 percent rise in GGR for 2025, while local government estimates a 5.8 percent increase, targeting MOP240 billion.

• Davis Fong Ka Chio, a gaming analyst at Macau University, is even more bullish, projecting GGR to reach MOP250 billion in 2025, driven by mass-market gaming and continued tourism growth.

Diversification: The new directive

During his visit, Xi stressed the need for Macau to diversify its economy beyond gaming. He urged the city to promote “appropriate economic diversification” and foster internationally competitive industries. This aligns with the ‘1+4’ economic model championed by Sam Hou Fai, which focuses on supporting leisure and tourism through sectors like medicine, technology, finance, and MICE (meetings, incentives, conferences, and events).

In support of this strategy, Macau’s six major casino operators are mandated to invest a collective MOP130 billion in non-gaming projects by 2032. These investments aim to attract a more diverse tourist demographic and mitigate reliance on the volatile gaming sector.

Tourism and its role in recovery

Tourism remains a cornerstone of Macau’s economic recovery. The city welcomed 35 million visitors in 2024, a 24 percent increase over the previous year. Mainland China accounted for 70 percent of arrivals, buoyed by relaxed visa policies. International tourism also gained momentum, with non-Asian visitors increasing by 66 percent year-on-year.

Macau has actively courted global travellers through high-profile events and attractions, including cultural festivals, sporting events, and conventions. The upcoming ITB Berlin trade show in March 2025 underscores these efforts, showcasing Macau’s evolving appeal beyond gaming.

Long-term outlook

• Looking ahead, analysts believe Macau is on track for full recovery by 2026. Key factors include:

• Mass gaming growth: A shift away from VIP-centric revenues toward mass gaming offers stability and higher margins.

• Policy support: Initiatives to enhance gaming tourism and diversify the economy are expected to yield long-term benefits.

• Global economic trends: Favourable monetary policies and improved consumer confidence in Macau could further boost the gaming and tourism sectors.

While challenges remain, including potential geopolitical tensions and economic uncertainties, Macau’s strategic focus on diversification and robust tourism infrastructure positions it well for sustained growth.

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