Operator News

China – Mixed bag for Melco as it outlines growth pipeline in Macau

By Phil - 25 July 2018

As its focus turns to the IR opportunity presenting itself in Japan, Melco Resorts has made sure it has all its ducks in a row in Macau.

It delivered a mixed bag of results in its second quarter with its City of Dreams property in Macau down 10.4 per cent, Altira Macau up 14.4 per cent, its Mocha Clubs in Macau down 4.4 per cent, Studio City down 5.4 and City of Dreams Manila in the Philippines down 1.3 per cent.

Overall its operating income dropped by seven per cent to $118.1m in the second quarter although EBITDA increased by 7.9 per cent to $355.5M boosted by EBIDTA performance at City of Dreams Manila and Altira Macau. Net revenue for the second quarter of 2018 was US$1,228.6m, representing a decrease of five per cent from US$1,298.2m.

The focus for the quarter was very much on revamping City of Dreams in Macau with the launch of its latest hotel Morpheus.
Lawrence Ho, our Chairman and Chief Executive Officer, said: ““The opening of Morpheus marks a new beginning for City of Dreams. Our premium portfolio now includes the sleek, modern Morpheus; the chic, classic Chinese Nüwa; and the upcoming hotel Libertine, the funky rebel, which starts development in the second half of 2019. They all offer guests premium and luxury experiences but each has its own distinctive style and design while maintaining the same focus on quality and attention to detail.

Beyond Morpheus, the relaunch of City of Dreams included extensive renovation on the mass gaming floor, with newly designed gaming space being unveiled to guests in June, along with the opening of Morpheus.

Mr. Ho added: “On top of that, renovation in the VIP area on the second floor of City of Dreams is ongoing and we plan to open these upgraded VIP gaming spaces over the next nine months. We will also commence the renovation of Nüwa after the Chinese New Year with the rolling refurbishment of the hotel anticipated to conclude before Chinese New Year 2020. Lastly, we plan to start the redevelopment of the Countdown Hotel [previously Hard Rock] in the second half of 2019. That involved a complete overhaul of the interior, which will take roughly 18 months to complete.

“The renovated hotel will be rebranded Libertine and will complement our City of Dreams portfolio with guest rooms that are luxurious, yet ultra cool.”

Moving to Studio City, Melco has exciting plans ahead.

“At Studio City, we are embarking on a series of property upgrades to refine the entertainment offerings, which include an incredible new stunt show created with our new partner Stufish, a London-based world-renowned entertainment architect, Asia’s largest Virtual Reality zone and a fantastic new street of food and beverage,” Mr. Ho explained. “Looking further ahead, we still have the Phase 2 expansion of Studio City in our growth pipeline, which offers a significant point of differentiation from our Macau competition. We are currently in the process of developing our detailed design, while targeting to commence construction.”

“Lastly, Japan continues to be a core focus for us. We expect development of the next generation of integrated resorts to soon commence in this incredibly exciting, yet currently underpenetrated, tourism destination. With our focus on the Asian premium segment, high quality assets, dedication to world-class entertainment offerings, market-leading social safeguards and compliance culture, and our commitment to being an ideal partner to local governments and communities alike, we believe Melco is in a strong position to help Japan realize the vision for integrated resort development with a unique Japanese touch.”