A senior executive of Macau casino operator SJM Holdings Ltd said on Thursday that the firm still expected the opening of its Grand Lisboa Palace casino resort project (pictured) to be “in the second half of 2020”.
By that time all the hotel rooms and the casino at the new property should be ready, but not all the shops leased, said Ambrose So Shu Fai, vice chairman and chief executive of SJM Holdings, on the sidelines of a public event in Macau.
“It [Grand Lisboa Palace] could have a partial launch by the second half of 2020: by then not all of shops would be leased out in time. But the hotel rooms should be all launched, with the casino and some of the shops,” Mr So remarked to local media on the sidelines of a company reception to mark the 70th anniversary of the People’s Republic of China.
Banking group Morgan Stanley mentioned in a recent memo that the opening of the approximately 1,900-room, HKD39-billion (US$5-billion) Cotai project Grand Lisboa Palace might be delayed until January 2021.
The SJM Holdings CEO noted in his Thursday remarks that his firm had requested Macau public works officials to inspect those parts of the Cotai site already finished. But he stressed that it was hard to anticipate the exact timetable of the launch of the Cotai project, as it was dependent on the local government issuing the relevant operational permits.
Grand Lisboa Palace will have three hotel towers with the respective branding “Grand Lisboa Palace”, “Palazzo Versace”, and “Karl Lagerfeld”, according to publicity materials previously issued by SJM Holdings. The Cotai property will also have facilities for events, meetings and conferences, and for shopping, dining and entertainment, as well as a casino.
The Cotai project should boost the group’s gaming business, Mr So said.
He added, regarding the outlook for the group’s gaming revenue in 2019 as a whole: “I hope that this can [be] level [year-on-year] as last year.” He said the firm faced several challenges, including a lacklustre global economic outlook, and months of anti-government protest in Macau’s neighbouring city, Hong Kong. Some analysts have suggested those factors might have had a negative impact on the spending behaviour of mainland Chinese tourists to Macau.
“We at SJM hope that our local gaming earnings will not be less than before,” Mr So remarked regarding 2019, adding he hoped the firm could “at least maintain our current [earnings] status until Grand Lisboa Palace is launched – which could boost our business”.
He said his firm’s casino performance during the Chinese week-long public holiday encompassing October 1′s National Day had been “so-so”. China’s State Council has this year declared October 1 to October 7 the holiday season, which is also sometimes referred to as autumn Golden Week.
“We saw good foot traffic at our properties [during the National Day break so far], but business at casinos is so-so,” the CEO said.
Gaming business was “a bit worse than expected: we thought more traffic would bring better income but it was not really the case,” he added, noting that VIP gaming in particular was “not doing well”.
The average hotel occupancy rate under the firm’s brand had been “over 90 percent” so far during the Golden Week break, the SJM executive said. “We are doing quite well in our hotel room occupancy because our room inventory number is not that big. But we could not adjust the [holiday] room rates as high as before,” he explained.
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”Many investors cite Golden Week as a catalyst to significant, sustainable visitation increases and a showcase for profitability for many casinos [in Macau]... However… we are concerned recovery estimates may again be pushed back”
Analyst at Roth Capital Partners