Chips down for Asia gaming sector

But analysts say the squeeze is likely to be short-term, and Asia’s gaming sector should weather the financial turmoil better than Las Vegas.

“I don’t think this will end the Asian gaming boom,” said Bill Eadington, economics professor and director of the University of Nevada Institute for the Study of Gambling and Commercial Gaming.

However, he said the crisis “certainly is going to have a noticeable impact for a year or two.”

Early signs of an industry-wide slowdown have already emerged in Macau, the Las Vegas of the East. Government figures showed average hotel occupancy rates sank 7.1 percent to 76.7 percent in August from a year ago.

Gaming revenues in the southern Chinese city are reported in local media to have dropped 3.4 percent to around US$860 million year-on-year in September, the first such decline since January 2006.

Part of the drop can be attributed to recent moves by Beijing to impose restrictions on mainland Chinese visitors to Macau, analysts told AFP.

But the region, including Macau, can also expect to feel the pinch from a financial crisis which has already slowed the US economy, analysts said.

“The recent shocks to the global economic system have definitely impacted the psyche of the Asian leisure tourist,” said Jonathan Galaviz, a partner with Nevada-based travel and leisure consultancy Globalysis.

“There is some evidence that spending by tourists in Macau is softening,” he said, but “in the long run, Asia continues to be a bright spot for long-term tourism sector growth and Macau’s casino sector should be able to capitalize upon this growth over the next decade.”

While Macau government figures show visitors from China down 10.7 percent year-on-year in August, those from Southeast Asia soared 119.2 percent over the same period.

Sometimes during economic adversity people actually gamble more, said David Green, Macau-based gaming practice director with Pricewaterhouse Coopers.

Analysts said Asia’s growing reputation as a gaming hotspot can only increase with several projects under development.

Official figures from Macau earlier this year said there were 28 casinos in the territory. Analysts have said another 15 are to open in the next four years.

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