Casino operator MGM China Holdings Ltd expects to complete by the third quarter of this year a set of additional suites at the south tower of its MGM Cotai casino resort in Macau. The information was provided on Wednesday by company chairperson Bill Hornbuckle (pictured in a file photo).
Mr Hornbuckle added: “We are also remodelling our MGM Macau villas and the gaming space on Level 35. On both properties, we are adding food and beverage options focusing on our gaming floors. We are also organising themed property attractions to attract visitation.”
He was speaking on the first-quarter earnings call of MGM China’s parent, United States-based MGM Resorts International. Mr Hornbuckle is president and chief executive of MGM Resorts.
According to a note from brokerage Sanford C. Bernstein Ltd in Hong Kong following MGM group’s conference call, the company’s expansion plans for the south tower of MGM Cotai include an additional 28 suites.
MGM China said in its 2020 annual results, filed with the Hong Kong Stock Exchange in late February, it was “developing the MGM Cotai South Tower suites at an expected total capital cost of HKD677 million (US$87 million) to strengthen our position in the premium mass market.” The firm said at the time that the additional suites were part of its strategy for business recovery from the Covid-19 pandemic and were expected to open in mid-2021.
During the conference call with analysts, Mr Hornbuckle also discussed business recovery in the Macau casino market.
“While marketwide GGR in the first quarter improved sequentially compared with the fourth quarter, Macau’s business [volumes] remained well below pre-Covid levels,” he said. “The rate of Macau’s recovery, we believe, will remain heavily dependent on broader sentiment as well as the pace of vaccination roll-outs throughout the region, which will ultimately lead to the easing of travel restrictions.”
The lifting of quarantine requirements for travel across the Macau-Hong Kong boundary was also an “important variable” in the recovery of Macau’s gaming market, Mr Hornbuckle said.
Hubert Wang, president and chief operating officer of MGM China, added that the eventual resumption by the mainland authorities of electronic visa issuance for trips to Macau, would also be positive for market recovery.
May Golden Week demand
Mr Wang stated that consumer demand for the MGM properties regarding the upcoming May Golden Week, was “pretty strong.”
The firm expected its hotel business “to reach almost full occupancy, similar to what we saw two years ago”. According to Mr Wang, customer demand for the upcoming holiday period was higher than seen recently during the Chinese New Year holiday break or the October Golden Week last year.
“It’s also very important to point out that the demand from our high-end customers remains pretty strong, from premium mass, to in-house VIP,” he added. “This momentum actually started in March with the market gradually picking up.”
The MGM group’s appetite for investing in a casino resort in Japan was also discussed during Wednesday’s conference call.
Japan’s Osaka prefecture said in early April that no fresh private-sector suitor had come forward as a result of the extension of its request-for-proposal (RFP) process concerning the metropolis’ tilt at having a casino resort. That meant casino operator MGM Resorts International and its local partner Orix remained the only qualified consortium.
“We are still very focused [on the Japan opportunity]”,” Mr Hornbuckle said, adding that MGM Resorts expected to be requested to deliver a final proposal to the Osaka authorities by late July.
Japan’s national government will accept submissions from candidate locations and their operator partners from October 2021 to April 2022 after which time it will select up to three winning locations for IR development.
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