With its operations in Macau beginning to stabilise, Macau Legend Development Limited is looking to diversify its revenue streams with the purchase of Savan Vegas Hotel and Entertainment Complex in Laos.
The operator of Fisherman’s Wharf, Pharaoh’s Palace Casino and Babylon Casino in Macau, will spend US$42m on buying Savan Vegas from the Ministry of Finance of the Lao People’s Democratic Republic.
Savan Vegas boast 92 tables and 493 slot machines; a contemporary 476 room hotel and convention centre, restaurants, bars and other dining facilities, spa services, recreational facilities, retail shopping facilities, ATMs, and transportation and car rental services.
Macau Legend has been offered an exclusivity period of 49 years in the provinces of Bolikhamsay, Khammouane and Savannakhet.
Macau Legend. Co-Chairman David Chow, said: “Savan Vegas is located just on the border with Thailand and is an area that the Government of the Lao PDR has earmarked as part of its development strategy. It enjoys close proximity to an international airport to cater for the strong feeder markets from Thailand, Vietnam and China as well as the visitors from Cambodia, Malaysia and Singapore. We can leverage on Macau Legend’s experience and connections to build on the already more than 1m annual visitors to Savannakhet.”
Macau Legend want to develop a land parcel in the Savan Seno Special Economic Zone of the Savannakhet Province of the Lao PDR which is adjacent to the existing Savan Vegas Hotel and Entertainment Complex. The planned development would include two golf courses, a 600 room hotel, villas, casino, exhibition hall and spa, pool facilities, staff quarters and training facilities.
Mr. Chow added: “Over the short term, in Macau, the market has been challenging which means it is an opportune moment to invest for the growth. Our first overseas project at Cape Verde is progressing smoothly on budget and on schedule, which allows us to take additional investments in areas with high growth potentials. Laos provide such an opportunity. We have strong support from the Government of the Lao PDR and since the facilities are already in place this should shorten the development time in helping develop the market for tourism in this region. We will continue to look to invest in and develop integrated resort projects outside of Macau. We will continue to focus on Southeast Asian destinations where the
“One Belt, One Road” policy from China is supporting new investment in tourism and tourism related infrastructure and also in Portuguese-speaking countries where there is a similar policy initiative.”
The investment caomes at a time when Macau Legend saw its revenue decrease by 3.7 per cent to HK$350.6m in its first quarter, ending March 31.
It points to stabilisation of the Macau market but is clearly motivated to invest elsewhere as well.
Gaming revenue decreased by 10.6 per cent to HK$216.3m. Gross gaming revenue of mass gaming tables and outsourced VIP tables at Pharaoh’s Palace Casino decreased by 15.5 per cent to HK$258.3m and 87.3 per cent to HK$92.3m, respectively.
Gross gaming revenue of mass gaming tables at Babylon Casino increased by 11.5 per cent to HK$57.6m.
New Legend, the company’s self-run VIP operation, contributed gross gaming revenue of HK$80.6m, representing an increase of 58.3 per cent
Harbourview Hotel, the Group’s first new hotel of the redevelopment of Macau Fisherman’s Wharf opened in February 2015, contributed revenue of HK$33.3m to the group, represented an increase of 139.8 per cent.
Mr. Chow, said: “All gaming segments in Macau including the VIP, premium mass and mass market continue to be difficult but gradually there are signs that the market has stabilised.”
The “mid-term gaming sector performance” review recently released by the Macau Government has casted a favourable overall tone in terms of the industry’s contribution in expanding the economy, attracting foreign investments, improving social welfare and labour productivity. However, the review has also indicated a likely stronger oversight in VIP segment and that diversification is needed in order to lessen dependence in a single industry.
Mr Chow said: “As structural factors will likely take time to improve, we are taking positive steps in spreading risks and at the same time, committed to building for the future. Our second new hotel at Macau Fisherman’s Wharf is on schedule for a 2016 opening, whereby our mass market and New Legend VIP businesses will have a new 5-star environment to upgrade. For our overseas investment, our first overseas project at Cape Verde is progressing smoothly on budget and on schedule. Ground-breaking ceremony was held on February 8 2016 and construction work has commenced.”
He added, “In Macau, we will continue to focus on cost controls measures and at the same time, work harder to grow the mass segment. Our self-run VIP business is expected to benefit from the opening of the second new hotel in Macau Fisherman’s Wharf later this year. In addition, the Group will continue to focus on Southeast Asian destinations where the “One Belt, One Road” policy from China is supporting new investment in tourism and tourism related infrastructure and also in Portuguese-speaking countries where there is a similar policy initiative.”