Boosted by the Chinese New Year holiday period and reported strong VIP demand, Macau revenue in February at 22 billion Macau patacas (US$2.75 billion), up 17.8% from a year ago and well ahead of consensus estimates of high single digit growth. February was the best monthly showing since January 2015. But it’s also a reminder of the mountain Macau’s recovery, now in its seventh month, must climb: every month from October 2011 through January 2015 had higher casino revenue than February 2017.

J.P. Morgan Securities in Hong Kong calls the February result “a truly remarkable beat.” Noting the administrative quirk that counted revenue from January 31, the first day of the New Year holiday, as part of February, analysts DS Kim and Sean Zhuang calculate that average daily revenue grew 22% to MOP821 million [USS102.7 million], the best in 28 months and 17% above the October holiday month level. They estimate VIP revenue rose 20% and mass revenue gained 15%. “This Chinese New Year was the first major Chinese holiday following the recent ‘VIP turnaround’ (which in turn substantially improved liquidity in junket system) and new property openings (which increased the room availability during peak periods); thus, the industry was able to deliver full potential of the current demand pictures,” the analysts write, underscoring the impact of the openings of Steve Wynn’s Wynn Palace and Sheldon Adelson’s Parisian Macao along the Cotai Strip.

“February GGR appears to have benefited from both the strong days of Chinese New Year and a lift in overall VIP demand,” Buckingham Research Group analyst Christopher Jones writes. “So while mass market revenue continues to be a growing foundational element in the Macau growth story, VIP continues to surprise to the upside.” Some VIP gains may be attributable to China’s increased attention to outgoing currency flows and the arrest of Crown Resorts employees on the mainland, pushing high end business back toward junkets. Junket promoter Suncity Group’s tenth anniversary celebration that brought players and agents to town late in the month further stoked VIP volumes.

Seen as paired with January to smooth out the holiday effect, gaming revenue for two months is up a combined 10.6% from a year ago. J.P. Morgan estimates VIP revenue grew 13% over the two months, with mass revenue up 9%. Wells Fargo Securities Senior Analyst Cameron McKnight notes the two month total beat the consensus forecast of a 9% bump.

McKnight remains a relative Macau skeptic. A research paper with Associate Analyst Robert Shore last month, “This Time It’s Not Different,” suggests Macau’s recent turnaround remains fueled by mainland China economic stimulus, loosening credit and reinflating the housing bubble, just as in 2013. This time, however, the analysts note, the stimulus is much smaller and so its impact on gaming revenue will also be smaller and will prove unsustainable, petering out as stimulus disappears. Yet, they say, the market has priced in a V-shaped 2013 style recovery. Looking longer term, McKnight and Shore question whether mass gaming can pick up the slack, noting ongoing uncertainty over transport improvements and policies meant to support the mass market transition and Macau’s customer base still skewed toward the wealthy, noting challenges faced by Lawrence Ho’s Studio City project as a mass market property before adding VIP play late last year.

“Longer run we remain skeptical of a long sustained double digit growth environment for VIP,” Sanford Bernstein Senior Analyst Vitaly Umansky and colleagues write. “Mass GGR will need to show sustained 10%+ year/year growth.” Macau’s transition to a mass market tourist destination has a way to go, but at least for now, it’s heading in a positive direction.