Less than two years ago, many wondered if Macau’s casino revenue would ever prosper again. Now, May’s 12% increase stands as a disappointment. Just a quick wander around Cotai reveals just how well Macau is doing right now and, as analysts suggest, there’s still plenty of room to grow.

May casino revenue clocked in 25.5 billion Macau patacas (MOP; US$3.2 billion). The month’s 12% growth fell short of the consensus forecast of 17%, and it’s just the second month since January of last year that year-on-year gross gaming revenue growth has dipped below the teens. For the year through May, GGR is up 20%, and on pace for Macau casinos’ third best year ever at US$40 billion.

JPMorgan analysts DS Kim and Sean Zhuang attribute the May shortfall to one leading junket promoter’s “extremely poor VIP luck” that shaved four percentage points off the total; with normal hold for that junket, GGR growth would have come in at 16%, comfotably within the consensus range. Union Gaming Group in Macau didn’t cite bad news from its junket contacts, but instead suggested the shortfall came on the mass market side. Union Managing Director in Macau Grant Govertsen notes that mainland China police closed currency exchange booths in the shopping mall at Gongbei border crossing. Mass market players might exchange mainland currency there for Hong Kong dollars used in casinos, though there’s no shortage of alternate methods to obtain Hong Kong dollars.

“Finally,” Govertsen writes in a research note, “it is important to keep in mind that there could have been no external factors that affected the deceleration relative to consensus and that the market could simply be taking a breather after 22 months of growth (and even longer for mass). Simply put, the conversations we’ve had in recent days and weeks with the Macau Big 6 [gaming concessionaires] suggest continued bullishness.”

A tour of casinos across Cotai suggests the same. Gaming floors are crowded, and so are hotel elevators. Occupancy rates are bubbling along in the high 80s  – the latest hotel association and government figures are 86.9% and 89.4% respectively, investment advisory Sanford Bernstein reports – and overnight visits continue to grow.  Overnight visitors spend more than three times as much as day trippers, according to Macau’s Statistics and Census Service, and basically every kind of spending produces higher margins than VIP play.

For the first quarter, total visitor spending, excluding gaming, grew 12% to US$2 billion. If you add that figure to first quarter gaming revenue and call it total visitor spending (yes, some gaming spending is from locals, but it’s in the low-single digits), non-gaming spending represented 17.6% of that total. That a far cry from Las Vegas’ 65%-plus but well above the government’s 9% target. Taken with the steady increase in overnight visitors, tourist spending numbers show progress toward the authorities’ goal of making Macau a “world center for tourism and leisure,” rather than just a casino hub.

There’s plenty ahead to build on that progress. Melco Resorts is scheduled to open US$1 billion Morpheus on June 15. Melco Chairman and CEO Lawrence Ho says Macau deserves “a landmark,” and the Zaha Hadid-designed biomorphic tower with 770 rooms behind a free-flow exoskeleton is surely that. Named for the god of dreams, Morpheus will be the fifth and final hotel tower at City of Dreams, Melco’s flagship property, and its first attempt to create a brand from scratch since its partnership with James Packer’s Crown Resorts ended a year ago. So Melco is all-in on Morpheus and will go all out to promote it.

Around the corner, US$3.4 billion MGM Cotai is in the midst of a ramp-up that’s going to take at least the rest of this year. SJM Holdings’ Lisboa Palace is well underway to complete Cotai’s eastern corridor before the end of 2020. Wynn Palace, the other property in what Govertsen calls “Millionaires Row,” should find smoother sailing after the tumult of Wynn Resorts founder Steve Wynn’s exit. Already underway on the main drag, Sands China’s Sands Cotai Central morphing into Londoner, Sheldon Adelson’s next imitation destination alongside Venice and Paris on the Cotai boulevard he created.

Perhaps late this year, the bridge will open connecting Macau, Hong Kong and Zhuhai, including Hengqin island, a five-iron west of Cotai. The bridge will make Macau just a 30 minute drive from Hong Kong International Airport, potentially boosting international visitation and the convention business.

All this builds on a first quarter in which gaming revenue climbed 20.5%, and profits rose 26% for the six casino concessionaires, with analysts making cases for even more growth. JPMorgan’s Kim and Zhuang suggest the revenue mix toward high margin mass market business will continue, supporting greater profitability. Morgan Stanley’s Praveen Choudhary, Thomas Allen and Jeremy An observe that the sector’s US$2.4 billion Ebitda was still 12% below its peak in the fourth quarter of 2013, and several other metrics also trail peak levels. So as good as things are now, they can get better. The numbers, the hardware and the crowds all say so.