Macau casino concessionaire MGM China Holdings Ltd has begun converting rooms at its MGM Cotai casino resort (pictured) to create a total of around 60 new suites, the company announced on Thursday. The work is likely to be completed in the first quarter of next year.
In addition, the company recently finished construction of its “Alpha Villas” – a collection of 28 villa-style accommodations – at its MGM Macau property on the Macau peninsula. The final units became available to guests earlier this month.
“The villas have been well received by customers as we adapt to their latest tastes and trends,” the company said in a press release.
MGM China also had a “soft” launch for its Alpha Club at MGM Macau, described by management as “an ultra high-end offering that opened with 20 [gaming] tables”.
“We continue to fine-tune the [Alpha Club] offering and add amenities, with an official opening scheduled ahead of the October Golden Week,” said Jonathan Halkyard, chief financial officer and treasurer of MGM Resorts International, the parent company of MGM China.
The mention of October Golden Week was a reference to a week-long holiday in mainland China coinciding with China’s National Day on October 1.
The new customer offerings at MGM Macau and MGM Cotai were discussed during a conference call with investment analysts by the management of parent MGM Resorts, following its second-quarter results announcement on Wednesday.
For the reporting period, MGM China recorded net revenues of US$1.11 billion, compared to US$1.02 billion in the same period last year. The increase was primarily due to higher casino revenue, driven by a rise in main floor table games drop and an improvement in VIP table games win percentage, the parent said.
“We are focused on continuously refreshing our products and services,” said Kenneth Feng Xiaofeng, president and executive director of MGM China, during the call.
He added: “We just want to make sure that every investment we are making is effective and reflects what the customers want [and] the latest trends.”
MGM Resorts’ chief executive and president, Bill Hornbuckle, said the group was aiming to continue “the momentum at MGM China, which absolutely shone in the second quarter, with record adjusted EBITDAR [earnings before interest, taxes, depreciation, amortisation, and restructuring or rent costs] and a market share of 16.6 percent, representing the highest sequential gain among all [Macau] concessionaires.”
He added: “What’s even more impressive is that our share increased every month of the quarter ending in June, reaching 1.3 times our fair share of the market.”
Mr Feng noted that MGM China continued to see “a very strong trend” in performance during July.
“Our performance is pretty robust. We are seeing strong volumes across nearly all business segments, as well as solid market share and margins. We are expecting a promising summer,” he said.
Looking ahead, Mr Feng stated that the management of MGM China felt “pretty confident” it could continue to maintain a gross gaming revenue market share in Macau “around the mid-teens” and an EBITDA margin “in the mid- to high-twenties.”
MGM Resorts CFO Mr Halkyard highlighted the importance of MGM China’s positive results for the parent company. He recalled that the Macau subsidiary updated its official dividend policy in March, under which it may pay a regular dividend of up to 50 percent payout, plus special dividends where applicable.
“That is, of course, very important to MGM Resorts, as a major shareholder [in MGM China], and that dividend income [amounts to between] US$150 million and US$200 million a year. It’s a substantial source of cash flow for the [parent] company, and, I believe, an appropriate level for MGM China.”
