Macau casino operator MGM China Holdings Ltd announced on Thursday a salary increase for its non-management employees. The pay rise will be effective from March 20, and was described in a company press release as a “cost of living adjustment”.
Non-management employees earning up to MOP16,000 (US$2,000) per month will receive a pay increase of MOP500 per month, which represents an increase in the range of 3 percent to 7 percent, said MGM China. Team members earning above MOP16,000 per month will receive an increase of 2.5 percent, the firm added.
MGM China’s chief executive, Grant Bowie, noted in a statement in the press release that the contributions from all employees have been vital to help the company “through … challenging times”.
“As we grow our footprint with the opening of MGM Cotai, we will have a team of over 11,000 employees with us at MGM, and we will continue to invest in nurturing local talents and guide them in building successful career paths as we always have,” said Mr Bowie.
The casino operator had said that it plans to transfer approximately 40 percent of its current staff from the existing single property, MGM Macau (pictured) on the city’s peninsula, to MGM Cotai, its under-construction new resort in Macau’s Cotai district.
“What’s really important is that we can have equal levels of commitment to MGM’s service excellence,” Mr Bowie said on a conference call with analysts last month following the announcement of the parent’s firm results. U.S.-based MGM Resorts International is 56 percent owner of MGM China.
Mr Bowie added at the time: “In fact, when we’re recruiting, we’re probably recruiting as many people back into this property [MGM Macau], so that that we can release talent that we [already] have [in Macau, for work at MGM Cotai] – to make sure that we can maintain the [service quality] commitment, because at the end of the day, we really don’t care which MGM [property] they go to, as long as it’s MGM.”
Higher Cotai budget
The opening of MGM Cotai is now scheduled for the second half of 2017. Under the terms of the land concession contract, MGM China is required to build and open MGM Cotai by January 2018.
In its 2016 results announced last month, MGM China said the expected total development cost of MGM Cotai is approximately HKD26 billion (US$3.35 billion), excluding land costs and capitalised interest. The company had previously mentioned a budget of HKD24 billion.
James Murren, chairman of MGM Resorts, said on the conference call in February that that company is “comfortable” with the revised budget for MGM Cotai. “There is a little bit of increase because of the time of when we’re opening this [project], but we’re willing to take that increase because of the time, because we want to make sure it’s a good product when it does open this year,” said Mr Murren.
The executive added that there was no chance that the company would need to have any kind of discussions with the Macau government about the land concession. “We are opening it this year, in sometime in the middle of the second half,” stated Mr Murren.
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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