Lawrence Ho, chairman and CEO of Melco Resorts & Entertainment, says Phase 2 of his Studio City integrated resort in Macau will be complete by the end of the year, but won’t open until next April at the earliest.
During a third-quarter earnings call on November 2, Ho said Melco will “monitor the market closely to determine the appropriate time to open and we are currently anticipating the opening to be in stages beginning in the second quarter of 2023.”
He said the integrated resort is uniquely positioned for success in the market, which has been hammered by Covid-19 and Beijing’s strict zero-Covid policy. He pointed to its location, adjacent to the Henqin light rail link, as an advantage, along with the property’s planned emphasis on mass gaming.
“We think when the market reopens, Studio City, given its location … will be the first stop to Macau in the future,” Ho said.
According to Inside Asian Gaming, Ho added that he will not immediately pursue a total acquisition of Studio City’s parent company, Studio City International Holdings Ltd., of which Melco currently holds a 54.9 percent stake. But a takeover is still in the plans.
“The way we have always positioned Studio City, as more mass-focused, fits well with the potential change in demographics going forward, so at the right price we would love to own all of that asset.
“But there must be a willing seller and a willing buyer for the right price and honestly, given what has happened in the last three years, we will continue to be on defense in terms of cost containment and really waiting for the market to reopen before we do much. But going forward, from a medium to long-term view, sure, absolutely [we would like to buy out Studio City].”
Asked about China’s pandemic policy and accompanying travel restrictions, Ho focused on the positive: the resumption of eVisas and package tours from Mainland China, which were set to begin on November 1. He called it the “best news we’ve heard in the past three years and potentially the biggest news for the next year.” But results won’t come immediately, he added. “China is a huge country of 1.4 billion people, so when they do things at the national level, to have it trickle down to the provincial and city level takes time.”
Melco has posted 11 straight quarters of net losses, including a US$244 million loss in the third quarter, which ended September 30.
According to China Travel News, as of last week, representatives of Macau’s tourism industry were still waiting for the resumption of group tours to Macau.
“The travel industry is looking forward to the reopening of tours from the mainland, but it is not yet known when the reopening will actually take place,” said Andy Wu Keng Kuong, president of the Macau Travel Industry Council.
The delay may have been related to an uptick in Covid-19 infections. As reported by Inside Asian Gaming, on November 6, there were 5,500 confirmed cases in Mainland China including 2,000 cases in Guangdong Province.
Late last month, the MGM Cotai casino was closed after a dealer tested positive for Covid. Some 1,500 staff members and guests were ordered to remain inside the resort during the shutdown. On November 2, after three days, the casino reopened.
