GGRAsia – MGM China eyes more of ‘booming’ Macau biz: Hornbuckle

MGM China eyes more of ‘booming’ Macau biz: Hornbuckle

Nov 09, 2023 Newsdesk Latest News, Macau, Top of the deck

“Business is booming” in Macau, says Bill Hornbuckle, chief executive and president of MGM Resorts International, parent firm of Macau casino operator MGM China Holdings Ltd.

The group is working to capture as much of that boom as possible, with steps including ugrades to a gaming area at MGM Cotai, and six new villas at MGM Macau, he added on Wednesday, during the call following the third-quarter earnings announcement of MGM Resorts.

Referring to a recent holiday for mainland China consumers that spanned the final two days of September and the first six days of October, Mr Hornbuckle (pictured in a file photo) stated MGM China had “an amazing Golden Week which led to market share for October of over 15 percent, and an all-time record adjusted property EBITDA [earnings before interest, taxation, depreciation and amortisation] for the month.”

The 15 percent figure was understood to be a reference to share of Macau casino gross gaming revenue (GGR).

Andrew Lee, an analyst at brokerage Jefferies Hong Kong Ltd, said in a Wednesday note, that MGM China’s “monthly market share increased to 15.5 percent – from 14.3 percent – in the third quarter.”

Mr Hornbuckle stated: “Results have been outstanding because of the ingenuity and execution of the team at MGM China.”

The group CEO further noted: “We are still laser-focused on three key priorities: making… changes to our casino floors and existing room products, to maximise yields; taking care of our mass and premium-mass customers; and driving international tourism.”

He stated: “At MGM Cotai, we will start remodelling of our Platinum [gaming] area for completion early next year; and at the MGM Macau we’ve begun planning for a villa [accommodation] upgrade, with the addition of six new villas.”

Mr Hornbuckle said that MGM China has “about 3 percent of the suite product” in the Macau market.

“I think we are kicking on all cylinders there and doing the right things,” he added.

Hubert Wang, president and chief operating officer of MGM China, was asked on the call about player reinvestment rates in the Macau market. On market rival Melco Resorts & Entertainment Ltd’s third-quarter call on Tuesday, management had conceded player reinvestment had risen somewhat, among market competition.

Mr Wang said from MGM China’s viewpoint: “We haven’t seen irrational behaviour among all the operators” in terms of marketing programmes.

“In terms of our own reinvestment, it stayed pretty stable throughout the quarter, even at the premium mass level,” added the MGM China CEO.

He stated: “There are a lot of concerts and events that draw a lot of people into Macau and I think… that’s incremental to GGR.”

Mr Wang said the Macau government’s recent forecast of the equivalent of US$27 billion GGR for 2024 was “consistent with our belief and expectation”.

The MGM China executive stated although there had been in mainland China “some softness in the overall macroeconomic situation,” the strong Macau tourism market was “not reflective of the average GDP [gross domestic product] growth and spending patterns in China”.

He observed that while Macau had about 30 million visits per year, the tally of unique visitors was “probably half of that”.

“It’s still a very small number in the grand scheme of the [China] population,” he noted.

Of the nearly 23 million visitor arrivals in the first 10 months this year according to preliminary data, the majority – as usual – are likely to have been drawn from mainland China.