Macau casino operator Galaxy Entertainment Group Ltd aims to complete a HKD1.5-billion (US$190-million) revamp of its existing flagship properties on Cotai and the Macau peninsula respectively, within a “year-and-a half to two years”. The changes to Galaxy Macau on Cotai would ensure there is a “seamless connection” to two further phases of that property that are due to open in the next few years.
So said the company’s deputy chairman Francis Lui Yiu Tung (pictured in a file photo) in a media briefing in Hong Kong on Thursday. It followed the company’s announcement of its fourth-quarter and full-year 2018 results.
“We’re spending HKD1.5 billion in upgrading the Galaxy Macau casino resort; StarWorld Hotel; and Broadway Macau, but that budget is mainly going to Galaxy Macau and StarWorld,” Mr Lui remarked. He confirmed work at Galaxy Macau and StarWorld was already under way.
Broadway Macau, next door to Galaxy Macau, had a major makeover that was completed in 2015, having previously been a “satellite” venue operated by a third party via the Galaxy Entertainment gaming licence.
Mr Lui said in his commentary: “StarWorld was in operation since 2006 and the first phase of Galaxy Macau was in business since 2011. So even though every year we spent a great deal of effort, time and money in the maintenance of these properties, at the moment we feel that we need to accommodate to the new likings of our clients.”
He added, referring to the Galaxy Macau revamp: “In order to have a better, more seamless connection with our Phases 3 and 4, we hope that this preparation can be finished before the completion of Phases 3 and 4,” Mr Lui added.
Gaming floor changes
Following the media briefing, Mr Lui was asked questions on the sidelines. Quizzed on whether there would be changes on the gaming floors of the properties under the rejig, he stated: “This revamp work is being done in each and every aspect, including our gaming floors, retail and hotel rooms – all in bid to enhance the properties’ attractiveness. We hope that this work will be completed in this [next] year-and-a-half, or two years, so that it can complement well the launch of Phase 3 and 4.”
Grant Govertsen, an analyst at Union Gaming Securities Asia Ltd said in a Friday note regarding the short-term revamps: “While short on details, we have a very high degree of confidence in Galaxy to target the capex [capital expenditure] effectively as they have demonstrated this ability over-and-over, on the road to making Galaxy Macau one of the highest-performing integrated resorts globally.”
Mr Lui had noted in the earlier media briefing that the longer-term plan, including the Phase 3 launch, would be in stages, “starting from mid-2020”. He added: “For Phase 4, we hope that it will be launched gradually, after 2021.”
According to previous statements by the company, Phases 3 and 4 of Galaxy Macau – said to focus on non-gaming – will include an aggregate of approximately 4,500 hotel rooms, aimed at family travellers as well as “premium”, and “high end” tiers. The new phases will nonetheless also have in aggregate some fresh gaming space, as well as a 16,000-seat multi-purpose arena, a 400,000-square-foot (37,161-sq-metre) conference and exhibition space, new shops, and food and drink retailers.
Mr Lui declined to discuss what hotel brands would be partners in Phases 3 and 4, adding that such details would be announced later.
During the Thursday gathering, Mr Lui said he expected steady growth in the company’s gaming earnings in this year, though he acknowledged challenges had arisen in the VIP gaming business in recent times.
“For the VIP gaming segment, in fact we have been facing competition not only from the new venues [on Cotai], but also from regional markets, and this will only intensify in future. Galaxy will not compete on price, but instead will enhance our hardware and software to compete better [in managing customers] and make our clients stay,” Mr Lui remarked.
Mass market, Boracay
The Galaxy Entertainment executive also said he was optimistic regarding the company’s mass-market gaming business as this segment would benefit from several “infrastructure positives” related to public-sector policy; in particular the consumer traffic brought by the Hong Kong-Zhuhai-Macau Bridge. “We’re saying that in these two years the scale and services of our mass segment will be enhanced further,” Mr Lui said.
“We have always been optimistic on the emerging middle-class clientele [from China]. This clientele growth is the fastest… We hope that what we are doing in our Phases 3 and 4 can accommodate their likings,” he added.
Mr Lui had said during an August media briefing in Hong Kong that construction application procedures for Phase 3, which began in 2016, had taken “longer than expected”, namely because of what he said were “new government requirements which we are obliged to follow.”
Regarding business opportunities beyond Macau, Mr Lui briefly noted to the media in his sidelines comments on Thursday that his company had not “given up” regarding its mulled resort project on Boracay in the Philippines.
“We have not given up our Boracay project. We do hope that… the local government understands that we are not just replicating a whole Galaxy Macau resort there in Boracay, but a low-density, eco-sensitive beach resort. We hope to build a 100-villa spa resort there,” Mr Lui stated.
When asked by GGRAsia whether Boracay was the only destination in the Philippines that the company would consider for a new-build casino resort investment, Mr Lui said: “We are not saying that. But we do examine all [potential] projects individually.”
(Updated 8.10am, March 1)
Mar 21, 2019The Japanese city and surrounding prefecture of Osaka are likely to make a decision on their development partners for a tilt at a casino resort by “this time next year”, said Jim Murren (pictured...
Mar 21, 2019
"We hope that the earnings power of that building [the Londoner], when we are finished, can rival that of the Venetian [Macao]"
Senior vice president of investor relations at casino operator Las Vegas Sands