Macau’s Gaming Sector Eyes Rebound in 2026 Amid Shifting Trends and Consumer Sentiment

Macau’s gaming industry is preparing for another year of muted performance in 2025, yet signs are emerging that point toward a possible recovery starting in 2026. According to CLSA equity analyst Jeffrey Kiang, changes in consumer sentiment, evolving visitor profiles, and strategic industry developments could form the bedrock for a new growth cycle.

Regional competition from emerging gaming destinations like Thailand and the Philippines is gaining attention, but CLSA doesn’t view these markets as significant threats to Macau’s traditional clientele. “Thailand looks to be a different gaming market from Macau,” said Kiang, emphasizing differences in both visitor composition and travel behavior. “Length of stay is over seven days in Thailand versus less than two nights in Macau. Visitor mix is also different—about 25 percent from Mainland China and Hong Kong for Thailand, compared to around 90 percent for Macau.”

At the core of CLSA’s forecast is a belief that the trajectory of Chinese consumer sentiment will play a pivotal role in shaping gross gaming revenue (GGR) in the years ahead. “Anything that drives consumers’ discretionary spending will work,” Kiang stated. One key barometer is the Hang Seng Index, which has historically mirrored trends in Macau’s gaming revenue. “We have looked at the year-on-year change between Hang Seng Index and GGR per visitation. They moved together from January 2016 to December 2019,” Kiang noted. “If the stock market can keep its momentum, we believe that trend will converge again soon.”

Looking further ahead, CLSA envisions a mix of continuity and innovation within the sector. “The integrated resort model and mass-focused gaming business should continue for land-based gaming,” said Kiang. But he also pointed to emerging themes that could reshape Macau’s broader tourism identity. Wellness tourism is gaining ground, having been a prominent focus at the recent Asian Integrated Resort Summit. “There are growing focuses on well-being, and we’re seeing some of that already within Macau’s IRs,” he explained.

In addition, intellectual property collaborations and experiences targeted at Generation Z could create fresh opportunities. “Anything that drives mind share and consumer experience would help. These hopefully would mean higher spending for operators, but offerings will decide how the pie is divided,” Kiang remarked.

CLSA recently revised its GGR forecast for 2025 downward to MOP230.8 billion ($28.8 million), citing a slow start to the year. “1Q25 Macau’s GGR marginally grew 0.6 percent year-on-year, which was weaker than we expected,” Kiang said. “Until May Golden Week, the news flow hasn’t been favorable.” Still, underlying day-to-day performance remains stable, with daily GGR averaging MOP624 million ($77.5 million) since the beginning of 2024. “The sector’s GGR should be quite steady. The key question is when the breakthrough will come,” Kiang noted.

CLSA anticipates that breakthrough could occur in the second half of 2025, aligned with a broader recovery in China’s property market. “Our property research team’s base case is the market should bottom in 2H25,” said Kiang. “That’s where our 2026 GGR growth case is predicated.”

Changing visitor behavior is also shaping market dynamics. Kiang explained that the decline in per-visitor spending is a result of a shift in the type of tourists coming to Macau. “It’s always those who gamble in casinos that return first during a reopening,” he said. “So GGR per visitor started from a high base in 2023.” With a more diverse range of leisure travelers returning and the expansion of non-gaming attractions, average spending has begun to moderate, especially within the grind or base mass market.

Consumer confidence in China remains fragile, with the index only slightly rebounding from its historic low of 85.7 in September 2024 to 87.5 in March 2025. “This impacts the grind mass more than the premium mass,” Kiang said, underscoring the challenge of converting visits into revenue.

Amid these headwinds, CLSA expects sector-wide EBITDA to decline 6 percent year-on-year in the first quarter of 2025. Cost efficiency and customer targeting have become essential. “The key is ensuring every penny spent translates into incremental revenue,” said Kiang. “Operators must focus on maximizing mind share—this will ultimately translate into higher revenue and EBITDA market share.”

Non-gaming activities, which now contribute around 15 percent to sector EBITDA, are increasingly seen as valuable traffic drivers. “Non-gaming can drive foot traffic into properties and casinos,” Kiang observed. “Targeting consumers with deep wallets can also be accretive to GGR.”

Nonetheless, hotel capacity remains a limiting factor. With only 47,000 rooms and occupancy rates hovering around 90 percent, the ability to attract and retain overnight visitors is restricted. “Room occupancy represents whether players—especially premium mass—are showing up in Macau,” said Kiang. “With 15 to 18 million overnight visitors a year, supply remains tight.”

In CLSA’s view, Macau’s path forward will hinge not only on the recovery of gaming revenues but on the ability of operators and policymakers to adapt to broader economic and demographic shifts. “If the stock market improves, if property stabilizes, and if operators innovate around consumer experience, 2026 could mark the beginning of a new growth chapter for Macau,” Kiang suggested.

By fLEXI tEAM