Apr 30, 2019 Newsdesk Japan, Latest News, Macau, Top of the deck
Casino group MGM Resorts International aims to attract other Japanese firms beyond financial services group Orix Ltd to join a consortium with the aim of developing a Japanese integrated resort (IR). That is according to Jim Murren, chairman and chief executive of MGM Resorts.
“We have been clear from day one that we believe it is essential to work with Japanese companies to develop a uniquely Japanese resort, and we have found a like-minded and natural partner in Orix,” Mr Murren (pictured in a file photo) said on a conference call with investment analysts on Monday, following the announcement of MGM Resorts’ first quarter results.
He added: “We are forming a robust consortium that is anchored by, but not exclusive to, Orix.”
Makoto Inoue, the chief executive of Orix, had said in March that MGM Resorts and Orix were to form a consortium, with each firm holding an equal amount of equity, while “Osaka corporations” would be expected to hold the rest.
MGM Resorts latter confirmed in an email to GGRAsia that it was linking to Orix with the aim of developing a Japanese casino resort. But the casino operator did not provide further detail at the time.
In Monday’s conference call, Mr Murren reiterated MGM Resorts’ strategy – mentioned in February – of focusing on Osaka for its Japan casino push.
“Just recently, I was able to meet the mayor and the governor of Osaka, and was honoured to inform them that MGM has adopted an ‘Osaka first’ strategy, focusing our company’s considerable resources on creating a breath-taking resort to celebrate the entire Kansai region,” he said.
Mr Murren added: “On Japan, our company has had a team there for roughly six years. We continue to deploy exceptional resources to that market. We expect to win and get a great return on all of it.”
Osaka’s request-for-concept (RFC) application phase in its effort to identify parties interested in being commercial partners for hosting a casino resort began on April 25.
Japan’s Prime Minister Shinzo Abe has endorsed the legalisation of such resorts as a stimulus for inbound tourism. Three venues will be allowed in the first phase of liberalisation. Those local governments qualified to apply to the national government for permission to host a casino resort – namely prefectures and ordinance-level cities – need to team with private-sector partners prior making their bid to the national government.
Strong Labour Day holiday for MGM Cotai
During the conference, MGM Resorts’ management also discussed the performance of its Macau operations in the first quarter. The U.S.-based firm is the parent of Macau casino operator MGM China Holdings Ltd. MGM China saw its first-quarter adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) increase by nearly 27 percent from the prior-year period.
The chief executive of MGM China, Grant Bowie, said the company’s MGM Cotai casino resort was recording “very strong” demand for the upcoming Labour Day holiday period.
Mainland Chinese citizens are likely to be able to enjoy at minimum four consecutive days of recreation during the Labour Day holiday, i.e., during the period Wednesday, May 1, to Saturday, May 4, inclusive, which is prescribed as an official festive period by China’s State Council. A significant part of Mainland Chinese citizens is likely to be able to enjoy a fifth consecutive day of recreation, as May 5 is a Sunday.
Mainland China is the most significant feeder market for the city. According to Maria Helena de Senna Fernandes, director of the Macao Government Tourism Office (MGTO), Macau could see a “20 percent” year-on-year increase in visitor arrivals for the public holiday period surrounding the upcoming Labour Day holiday.
Mr Bowie added that MGM China continued to expand its market share in Macau in the first quarter of 2019, with an increase of “about 100 basis points in the quarter”.
The executive stated that since the opening of some new high-end accommodation at MGM Cotai known as Mansion villas in the first quarter, the firm was recording “some really positive signs and re-emergence of customers that we had not have in the property.”
Mr Bowie also confirmed MGM Cotai was eyeing to add new food and beverage offerings, namely to the casino space. In addition, MGM China was also looking to add up to 60 additional suites to the property, likely to become available in late 2020, according to Mr Bowie.
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Head of Asia gaming and leisure research at JP Morgan Securities (Asia Pacific)