Casino group Melco Resorts & Entertainment Ltd had “clearly” experienced “lost share” in the Macau market in 2023, and that was “part of the reason for our management change,” said its chairman and chief executive, Lawrence Ho Yau Lung.
The group’s management also clarified that it was shaking up the way it did business in the Chinese casino hub, including centralising the sales force.
Mr Ho and his executives were speaking on the group’s call to discuss fourth-quarter earnings, released on Thursday.
Referring to the departure announced last week of David Sisk as the group’s chief operating officer of Macau resorts, Mr Ho stated: “David did a great job for us during Covid in terms of trying to survive.
“But post-Covid, I guess we continued to cut too deep to the bone in terms of our operating expenditure and how we conduct our business.”
Mr Ho said the issue was “not so much the top-line market share”. He outlined: “That has never really been the case that we cared about. It was really about EBITDA [earnings before interest, taxation, depreciation and amortisation].”
The group reported fourth-quarter adjusted property EBITDA of US$303.4 million, 8.1-percent higher sequentially. It compared with negative adjusted property EBITDA of US$6.8 million in the final quarter of 2022.
In a February 23 statement, Melco Resorts said it was bringing in Alidad Tash as executive vice president of analytics and gaming operations for Macau; Stefan Bollhalder as vice president of hotels and food and beverage for the City of Dreams Macau casino resort; and Linda Switzer as vice president of retail.
During Thursday’s earnings call, Evan Winkler, the group’s president, gave some background on the reasons for the appointments.
He stated: “All of that is really focused on how we’re looking at our gaming operations and how do we really get greater efficiency in terms of our spend there, where we’re allocating our resources, how we’re driving the floor layouts.”
That included, said Mr Winkler, “player reinvestment”, an element of the cost of doing business in Macau that has been recently a topic of some debate.
CoD retail, centralised client sales
The group president said that in terms of the luxury shopping mall at City of Dreams (CoD), the group’s Cotai flagship in Macau, “we feel that bringing in someone who’s got deep long-term relationships with these key luxury brands is going to help us enhance that offering”.
Mr Winkler added: “That probably is not a today-tomorrow thing, but we continue to evolve the retail experience both at CoD and Studio City.” The latter was a reference to the group’s majority-owned property at the southern end of Cotai.
The group president added: “We brought in a vice president of hotel food and beverage at CoD to just make sure that from a guest and customer experience that we are leading the market once again across all fronts.”
Mr Winkler stated: “We’ve reoriented our sales force under a central point, so that we have more centralised focus around the customer experience and customer journey. And we’re also doing that in our premium areas as well.”
Mr Ho was also asked on the call whether the firm was looking to expand into new markets, namely to the United Arab Emirates – where Macau market rival Wynn Resorts Ltd is already building a casino resort – and Thailand, which is mulling legalising casino business.
Mr Ho said it was “a bit early” for that in terms of the industry recovery cycle post pandemic. “We’re still climbing out of the Covid hole,” he stated.
“We’re looking at some smaller potential projects, but nothing, I think that’s ready to be announced,” the CEO added. “In terms of the longer-term, bigger projects like UAE or Thailand, I think we’re kicking the tyres like everybody else.”
Though referring to the time and money spent on pursuing a potential project in Yokohama, Japan, which had not borne fruit he stated: “As we learn from the Japan process,” exploring new markets was “a multi-year process”.
