The aggregate investment budget for Macau-based casino operator Galaxy Entertainment Group’s Phase 3 and Phase 4 in Cotai will “definitely no less than” HKD43 billion (US$5.54 billion), the company’s deputy chairman Francis Lui Yiu Tung told Hong Kong media in Beijing.
He added that the venues would include facilities aimed at family visitors and young adults.
Mr Lui was speaking to the media while in Beijing as a delegate to the Chinese People’s Political Consultative Conference. Mr Lui was cited by Hong Kong Chinese-language newspaper Ming Pao, saying that the combined investment of the Galaxy Macau Phase 1 and Phase 2 developments in Cotai in Macau had been approximately HKD43 billion.
“For Phase 3 and Phase 4, it [the investment] will be definitely no less than that figure [HKD43 billion],” said Mr Lui, adding his firm hoped to offer “surprises” via the projects.
Mr Lui mentioned to the news outlet that the non-gaming component of Phase 3 would include a convention centre and a performance venue: Phase 4 would be a project “more geared towards family visitors, millennials, and middle-class clients”.
Millennials are defined by marketing professionals as people born between 1980 and 2000. Mr Lui noted in his comments that his firm had been “actively exploring” ways of attracting this particular clientele group, noting they liked “innovations, technology and chic lifestyle”.
Galaxy Entertainment stated in its 2016 results that the firm expected to commence construction of Phase 3 and Phase 4 late in the first quarter or early in the second quarter this year. In recent weeks there has been activity on the Phase 3 site.
In a July interview with Macau Chinese-language newspaper Macao Daily news, Mr Lui had mentioned that the aggregate budget for Phase 3 and Phase 4 would be “HKD40 billion to HKD50 billion”. A filing by the company in the first quarter of 2014 had referred to a combined budget of HKD50 billion to HKD60 billion for Phases 3 and 4.
According to Ming Pao, the Galaxy Entertainment deputy chairman expressed confidence there would be “stable growth” in the firm’s mass gaming and VIP gaming segment this year, despite the economic uncertainties seen in China and abroad.
Mr Lui was also cited by the news outlet as estimating a “high single-digit to low teens” growth in the firm’s gaming revenue for this year.
He additionally noted that the firm had maintained a stable market share, with rising income from its four existing fully-owned and directly managed properties in Macau – namely Galaxy Macau Phase 1 and 2, and Broadway Macau located in Cotai, and StarWorld Macau on Macau peninsula. The firm has had reserved a “seven-figure” budget in Hong Kong dollar terms for renovating its existing properties, Mr Lui said.
He reiterated comments made during the company’s recent full-year earnings announcement that it continued to explore opportunities in overseas markets, including Japan.
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"VIP growth [in Macau] is roaring back on the heels of last year’s economic stimulus – but we think this could stall once the effect of the stimulus and the Chinese housing bubble wears off – as it did in 2013-14"
Cameron McKnight and Robert Shore
Analysts at Wells Fargo Securities