With Macau still under the ‘severe impact of the COVID-19 pandemic,’ MGM China saw revenue down by 78 per cent for the year to approximately HK$5.1bn.
The Group had a negative adjusted EBITDA of approximately HK$1.4bn. Total visitation to Macau in 2020 was 5.9m, compared to 39.4m in 2019. Overall hotel occupancy in Macau was down to 28.6 per cent from 90.8 per cent a year ago. Gross gaming revenue (GGR) declined by 79 per cent to the lowest level in 14 years.
With the pandemic situation stabilising in the region in the second half last year, Macau has lifted the 14-day quarantine measures between Macau and Mainland China in July, followed by a resumption of issuance of tourism visas starting from August.
Despite logistical hurdles and nucleic acid testing requirements continued to impact visitation levels, the market has been steadily improving indicating a gradual recovery pace. Fourth-quarter market-wide GGR declined by 70 per cent year-over-year, compared with a 93 per cent year-on-year decline in the third quarter.
For the fourth quarter, MGM China recorded total revenue of approximately of HK$2.4bn, up by 550 per cent from the third quarter. The Group had turnaround for the quarter with a total adjusted EBITDA of approximately HK$367.2m, (2020 third quarter: HK$730.6m loss), with both properties recorded positive EBITDA.
For the quarter, MGM MACAU recorded adjusted EBITDA of approximately HK$247.1m, and MGM COTAI at HK$120.1m. Macau visitation and our business has been picking up since October Golden Week as we saw improving volume across all operations from the third quarter. Overall hotel occupancy grew to 57.3 per cent in the fourth quarter.
Market share of MGM China rose to 9.9 per cent in 2020 from 9.5 per cent a year ago. Fourth quarter market share reached 12.6 per cent with business outperformed the market. The Group maintained a healthy financial position. As of December 31, 2020, the Group had total liquidity of approximately HK$9.5bn, comprised of cash and cash equivalent and undrawn revolver.
Hubert Wang, President & Chief Operating Officer of MGM China said: “We are pleased to see MGM China turned profitable again driven by strong market share gains and continued cost mitigation efforts. Construction of additional suites at MGM COTAI is underway and expected to be launched in mid-2021. We have also begun other remodeling and refurbishment projects on both properties and additional food & beverage options on gaming floors to enhance customers experiences.
“We expect the broader rate of business recovery will continue to be gradual, driven by the premium mass market which both MGM MACAU and MGM COTAI are well positioned to capture. MGM China will continue to invest in strengthening our market position, and continue to believe in the long-term success of Macau. We have been committed to supporting Macau as a world tourism destination. We look forward to working with the government through the licensing renewal process in hopes to further our support for many more years to come,” Mr. Wang added.
Bill Hornbuckle, Chief Executive Officer and President of MGM Resorts International, added: “We’re pleased to finally see that MGM China’s back in the black driven by strong market share gains, as well as continued cost mitigation efforts. Better yet, we think the evolving market structure of Macau’s gaming squarely meets our strengths in the market. MGM China has always been geared to the premium mass segment between our branch office infrastructure, our product design, and our marketing capabilities. We’ve always had an advantage in the segment and our growing market share is evidence of this evolution.”