We haven't even hit the Chinese New Year yet, and already Macau is looking to stay on its hot streak in 2011. CLSA Ltd. this week upgraded estimates for annual gambling revenue, which are now expected to grow 30%, up from the previous estimate of 20%.
As if we need more reasons to like Las Vegas Sands
Tourism is driving the growth, with a 20.5% increase in visitors from mainland China and a 15% increase in overall arrivals in the first 11 months of 2010.
The success of Las Vegas Sands's Singapore casino, Marina Bay Sands, doesn't appear to be slowing down Macau's growth significantly. It may be taking some Asian customers outside of China who choose to visit Singapore over Macau, but this doesn't appear to be a big drain on business.
Slowing growth wouldn't be a bad thing
Growth in Macau might slow from a rapid 57.8% in 2010 to a more modest 30% in 2011, but casinos aren't being built as quickly as they once were, relative to gaming revenue. The "Big Three" and MGM Resorts
The exceptions are Las Vegas Sands's development on the Cotai Strip, which could open in late 2011, and the Galaxy Cotai, which will open this year. Those two casinos could make Cotai an even more attractive destination, leaving the Macau Peninsula in the dust, just like The Strip did to downtown Las Vegas.
An analyst's estimates should be taken with a grain of salt, but it is good to see increased confidence in Macau's gambling revenue in 2011. How much do you think Macau's gambling revenue will grow this year? Leave your thoughts in the comments section below.
For more Foolishness:
Fool contributor Travis Hoium does not have a position in any gambling stocks. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his Motley Fool CAPS picks at TMFFlushDraw.
Melco Crown Entertainment is a Motley Fool Global Gains selection. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.