New management appointments at Asian casino operator Melco Crown Entertainment Ltd mean “a significant change in operational organisation structure,” with greater responsibility devolved to leaders of the firm’s individual properties, said a Monday note from brokerage Sanford C. Bernstein Ltd.
But the institution also expressed some reservations about the appointment of a group chief marketing officer without gaming experience.
Melco Crown – a Nasdaq-listed company that uses the stock ticker name MPEL – announced on Friday several key executive appointments, including new presidents respectively for City of Dreams Macau and Altira Macau; and the appointment of Frederic Winckler – a former chief marketing officer for luxury fashion house Louis Vuitton and previously also an executive at advertising and marketing group J. Walter Thompson – to the newly-created role of chief marketing and brand officer.
“A lack of gaming/hospitality experience in the new CMO raises some concerns as the gaming industry, especially Macau, has its own idiosyncrasies,” wrote Sanford Bernstein analysts Vitaly Umansky, Zhen Gong and Yang Xie.
But the brokerage also noted: “Winckler’s extensive digital marketing experience may be critically important as Macau gaming operators continue to extensively utilise online marketing and social media.”
Sanford Bernstein observed: “Currently, the Melco Crown brand lacks the same recognition as some of its Macau competitors and in conjunction with the recent share divestitures by Crown Resorts [Ltd], the Melco Crown Entertainment name will be changed in the future in a major rebranding exercise.”
The institution noted that the other announced appointees at property level had extensive gaming experience.
It said Gabriel Hunterton, incoming president of City of Dreams Macau, had 18 years in gaming, including senior roles in business development and operations at MGM China Holdings Ltd’s MGM Macau gaming resort, as well as at Galaxy Entertainment Group Ltd.
Sanford Bernstein noted Andy Choy, incoming property president of casino hotel Altira Macau and of Mocha Clubs – the latter a Macau-based chain of slot-machine halls – had 10-plus years of gaming industry experience in Asia and Las Vegas, including as chief executive of The Riviera in the U.S. gambling hub; as well as chief gaming officer of Melco Crown shareholder Melco International Development Ltd.
The brokerage said – regarding the appointment of Jarlath Lynch as senior vice president of hotels, food and beverage for the casino group: “Food and beverage at Melco Crown was previously headed by Kristoffer Luczak: the company has not announced what role Luczak will play (if any) at Melco Crown.”
Sanford Bernstein added: “The new management announcements come two months after the departure of COO Ted Chan [Ying Tat] and senior vice president, gaming operations and strategy, Alidad Tash. Following these departures, we had raised some concern of execution risk until a new management structure is fully in place.”
The analysts stated: “The new appointments highlight that the organisational structure is evolving into a decentralised property management model with property presidents having greater responsibilities, sitting on MPEL’s executive committee, and reporting directly to CEO Lawrence Ho [Yau Lung], who continues to take a more hands on approach to MPEL management.”
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”Assuming that our [Tigre de Cristal] phase two project and the other future operators’ development plans remain on track, we may see the benefits of a ‘cluster’ effect [in the Primorye Integrated Entertainment Zone] as early as 2021”
Summit Ascent, lead developer of Tigre de Cristal