Asian casino operator Melco Resorts and Entertainment Ltd announced on Wednesday changes to several key executive positions, including the departure of Macau casino industry veteran Gabriel Hunterton. Mr Hunterton had been appointed property president of casino resort City of Dreams Macau in January last year.
The firm said additionally that David Sisk – most recently president of Melco Resorts’ 60 percent-owned Macau property Studio City on Cotai – would be replacing Mr Hunterton as president of City of Dreams Macau. Mr Sisk had been appointed property president of Studio City in 2016.
The company did not disclose in Wednesday’s press release when the changes would take effect.
Commenting on Melco Resorts’ management changes, brokerage Sanford C. Bernstein Ltd said: “While Hunterton was in the role for only a year, under his leadership, the property [City of Dreams Macau] had undergone considerable operational and marketing issues in mass (premium mass in particular). Hold rate in mass has been a considerable issue partly due to operating changes introduced by Hunterton.”
The City of Dreams Macau property is undergoing a major revamp. The Crown Towers hotel tower at the property was renamed Nüwa with effect from this month.
Another accommodation facility at City of Dreams Macau – previously branded the Hard Rock Hotel – is currently operating under the name ‘The Countdown’ until March 31, and will get a new branding after that time.
A new hotel tower for City of Dreams Macau – the US$1-billion Morpheus – is due to open in the first half of 2018. The new hotel will feature approximately 780 hotel rooms, suites and villas.
Melco Resorts flagged on Wednesday several other management changes.
Geoffry Philip Andres – currently president of City of Dreams Manila in the Philippines, a venue managed by Melco Resorts – will assume the role of Studio City property president, filling Mr Sisk’s previous role. As part of the rejig, Kevin Benning has been promoted to senior vice president and chief operating officer of the Manila property, said Melco Resorts.
Commenting on the management changes, Melco Resorts chairman and chief executive Lawrence Ho Yau Lung said: “The redeployment of our senior operating management across our integrated resorts is aimed at optimising our operating excellence. We are leveraging on key individuals who all have demonstrated their expertise in managing and delivering strong growth.”
In Wednesday’s note, the Sanford Bernstein team said Melco Resorts’ management changes deserved the “benefit of the doubt”. “But we would need to see improvement at City of Dreams in 2018,” said analysts Vitaly Umansky, Zhen Gong and Cathy Huang.
They added: “City of Dreams is now a turnaround story in our view (with a catalyst coming from Morpheus) as fourth quarter will confirm considerable problems, which in our view accelerated these management changes. City of Dreams has underperformed other Melco Resorts properties since Hunterton took over in January 2017, especially in mass gross gaming revenue and mass hold rate.”
Melco Resorts reported in November net revenue of approximately US$1.38 billion for the third quarter of 2017, up nearly 19.5 percent year-on-year. The company said at the time that the improved performance “was primarily attributable to higher rolling chip revenues at City of Dreams [Macau] and the commencement of rolling chip operations at Studio City in November 2016”.
The company said in a November filing that the rolling chip win rate at City of Dreams Macau was 3.5 percent in the third quarter of 2017 versus 2.6 percent in the comparable period in 2016. The mass-market table games hold percentage was 32.3 percent in the three months to September 30 last year, compared to 34.5 percent in the prior-year period.
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“We expect Las Vegas Sands to not have any material change in strategy. The focus remains developing Macau and Singapore”
Vitaly Umansky, Kelsey Zhu and Tianjiao Yu
Analysts at brokerage Sanford C. Bernstein