UPDATE 1-Macau gambling revenue hits record high in October
* Growth of 31.7 pct edges out high end of estimates
* Golden Week holiday sees 10.7 pct increase in visitors
HONG KONG Nov 1 (Reuters) - Gambling revenue in the southern Chinese territory of Macau surged 31.7 percent to a record high in October year-on-year, after a week-long national holiday boosted visitation from big-spending mainland gamblers keen to punt in the country's only legal casino hub.
October's revenue at 36.48 billion patacas ($4.6 billion) was the highest monthly figure on record, according to government data released on Friday. Analysts had forecast October growth in the world's biggest gambling market, to be up 27-30 percent.
A former Portuguese colony, Macau is located a one-hour ferry ride from the financial centre of Hong Kong. A special administrative region like Hong Kong, Macau is one of the world's fastest-growing economies due to its lucrative casino industry.
China's Golden Week national holiday, which took place in the first week of October, saw a 10.7 percent increase in visitors from mainland China compared to a year earlier. Macau's gambling revenues are highly dependent on the domestic market with more than two-thirds of tourists coming from the mainland. Visitor arrivals totalled 7.76 million for the third quarter of 2013.
The rise in revenues is largely attributed to the growth of "mass-market" visitors made up of China's growing middle class who are visiting Macau in greater numbers and spending more than ever before.
Macau's 35 casinos have typically relied on VIP "whale" gamblers to support revenue growth, but a crackdown on corruption by Beijing has seen the growth of VIP numbers fail to match that of mass market, which is growing from a much lower base.
The six licensed casino operators, Sands China, Wynn Macau, Melco Crown, Galaxy Entertainment, MGM China are all targeting the "premium mass" segment, made up of affluent gamblers who bet anywhere from 10,000 yuan ($1,600) to under 1 million yuan. The sector is more stable and provides higher profitability than VIP gamblers.
The lack of hotel rooms in Macau is a key constraint in terms of pushing revenue growth higher casino executives say. While eight resorts are in the works along with additional hotels, new capacity is unlikely to come online before the end of 2014.
Hotels reported close to full occupancy for the holiday period while local media said mainland visitors stayed at campsites due to exorbitant room rates. The cheapest five-star deluxe room on Macau's Las Vegas style Cotai strip was 5,888 patacas (US$737) per night.
Infrastructure developments in the coming years are expected to help lift the number of visitors to Macau. Currently most tourists come from Guangdong and other nearby provinces.
A bridge joining Hong Kong, Zhuhai and Macau is set to open by 2016, while expanded intercity rail links will shorten the time of travel from China's northern cities to the gambling centre.
Plans are also in place to upgrade Macau's capacity-constrained ferry terminals and international airport.