Five years after project began, it now awaits inspection
Back in 2012, flamboyant Hong Kong billionaire Stephen Hung announced he would build “the world’s most luxurious casino resort” in Macau. But as 2017 draws to a close, the 13 Hotel, on the Coloane end of the Cotai Strip, remains closed.
According to a report in the South China Morning Post, Hung’s Hong Kong-listed company, 13 Holdings Ltd., recently warned that building delays and a cash deficit means “significant doubt on the group’s ability to continue as a going concern.”
Originally the hotel was to have opened in 2016; in August, it missed an opening deadline tied to a US$384 million loan. While 13 Holdings Ltd. still maintains it will open the hotel before the end of 2017, a note from Union Gaming Securities Asia Ltd. earlier this year suggested financial hurdles may delay the opening into early 2018.
Moreover, 13 Holdings has yet to be granted a gaming license. That’s significant, because the hotel’s target demographic—Chinese high rollers—prefer to stay where they can play, said Margaret Huang, a Bloomberg Intelligence gaming and hotels analyst. A onetime partnership between the 13 and gaming giant Melco Resorts & Entertainment Ltd. collapsed due to stricter regulations in the jurisdiction.
The 13 brand is not for bargain-hunters. It features $1,500-a-night French Baroque suites and marble Roman baths for eight, along with 30 custom red Rolls Royce Phantoms for the transportation of guests. Ben Lee, managing partner at Asian gaming consultant IGamiX, said the hotel may have erred in targeting “the ultra-stratospheric segment.
“That market segment has long disappeared in the aftermath of the anti-ostentation campaign,” Lee wrote. “And it’s a wonder they never revised their business plan and structure when they still had the opportunity to do so.”
Huang added, “Without a casino, it would be nearly impossible to have gamblers book rooms separately.”
The uncertainty about 13 Holdings Ltd.’s $1.6 billion investment means eventual success “is anything but assured,” reported the Washington Post—a big problem for investors like the Janus Capital Group Inc., Fidelity International Ltd., Omega Advisors Inc., the Ontario Teachers’ Pension Plan and Steve Cohen’s SAC Capital Advisors, all of which plowed money into the project when it was first announced in 2012. The stock price has plummeted 92 percent from its 2013 high “to just barely above penny-stock status,” the Post reported last month.
But Maria Helena de Senna Fernandes, director of the Macao Government Tourism Office, says that body is ready to license the hotel. “All the paperwork is ready, we are just waiting for the developer to request the site inspection,” the MGTO director told reporters last week. “After that, we can issue the hotel license.”
In an email to GGRAsia on the same day, 13 Holdings stated, “The 13 is in the final stages of bringing the project to the market. If there are any major updates, we will announce to the public accordingly.”
