Despite being a latecomer to gaming operations in Macau’s Cotai district, MGM China Holdings Ltd would play to the strengths of its U.S. parent MGM Resorts International via entertainment and the experience of packaging a varied holiday experience under one roof.
So said Grant Bowie, (pictured in a file photo) chief executive and executive director of the Macau casino operator in comments on Wednesday regarding the HKD26 billion (US$3.35 billion) MGM Cotai resort, which is currently scheduled to launch in the second half of 2017.
“MGM [Cotai] is coming into the market near the end of the development of Cotai, so what we are looking to do is to work to our strengths which is in entertainment and entertainment content,” said the CEO on the sidelines of the MGM Academy Graduation Day 2017 at MGM Macau. The event featured more than 300 MGM staff members that have taken part in a variety of training and education courses offered by the company.
The company had said in a release following a topping off ceremony for the MGM Cotai venue in November 2015, that the property’s non-gaming facilities would include LED walls in an atrium area, allowing the venue to show huge images, and a theatre that could offer 14 different seating arrangements.
Mr Bowie was asked – following Wednesday’s MGM Academy ceremony – whether it might be challenging to sell to Macau visitors the 1,500 rooms MGM Cotai will add to the market.
The number of hotel rooms in Macau is due to increase by 39 percent over the next few years, according to Macau government data released on March 10.
Last year the number of visitor arrivals to Macau increased by only 0.8 percent year-on-year to 30.95 million, but the aggregate annual number of overnight visitors exceeded the tally of same-day visitors for the first time in 10 years, said the Macao Government Tourism Office.
MGM China’s Mr Bowie said his firm was confident that its ability to package a varied offer to tourists would be an important selling point for MGM Cotai.
“I think the key with the room selling comes back to the quality of the property: it’s the diversity of experiences, not only the theatre… our retail, our food and beverage, and the overall entertainment that we are going to be providing in the property will encourage people to stay with us,” said the CEO.
“Clearly there will be an advantage for those people who stay with us in terms of the value proposition that they will get from [the] packaging [of a] stay, dining and entertainment,” Mr Bowie added.
Art, high rollers
The firm said in a recent press release that MGM Cotai will feature a permanent art collection with more than 300 pieces, including 28 Qing dynasty imperial carpets and a commissioned collage by Chinese artist Xue Song.
Mr Bowie has previously indicated that MGM Cotai – across the road from Wynn Palace, the Cotai property of Wynn Macau Ltd, one of the Macau casino operators considered to be a specialist in VIP gaming operations – would not focus on VIP play.
In October 2015, Melco Crown Entertainment Ltd launched its Cotai resort Studio City with no VIP play at all. But after a modest initial ramp up in earnings from the property, the operator confirmed in early November 2016 that it was adding VIP play to its product offer.
MGM China’s Mr Bowie was asked on Wednesday about whether a proposed change to the regime for smoking in Macau casinos – that will include higher ventilation standards for smoking lounges on mass floors and the end of tableside smoking in all VIP rooms with VIP smoking lounges as a possible alternative – would be disruptive to Macau operators’ business and therefore depress revenue and possibly reduce profits in the short term.
Analysts at Morningstar Inc said in a recent note that the institution had factored a potential negative impact to Macau VIP revenue – caused by an end to tableside smoking – measured in mid-single digits of percent.
MGM China’s CEO said on Wednesday: “I think the solution that is hopefully going to be determined very shortly with the new [revised] legislation [on smoking] will be a sustainable long-term solution which will be the overall benefit of Macau: and if that means… some short-term pain, I think that’s something that we will accept.”
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Analyst at Roth Capital Partners