Wynn announced delay last year
Two U.S.-based resort companies have been granted more time to complete lavish resorts going up on Macau’s Cotai Strip.
According to the Jornal Tribuna de Macau, Sands China’s $2.7 billion Parisian Macao will open in November of this year, not April, as originally planned. And MGM China Holdings’ $3 billion MGM Cotai will open in early 2017, not the fourth quarter of 2016. The Wynn Palace in Cotai had already been delayed by at least six months.
MGM China CEO Grant Bowie told public broadcaster TDM the delay “is a good decision for Macau and it is a very good decision for MGM, because we all understand that market confidence is very important and that we need to be successful.” Macau is in the throes of a longstanding recession that began in June 2014 and has continued unabated for more than 20 months. But the losses have been less in recent months, and most analysts see a stabilization of the market this year, with hopes for a rebound next year.
“The transition from the VIP market to the mass market is occurring,” Bowie said. “That transition is probably taking longer and for the growth to come back to Macau is taking longer than we expected. And I think that, therefore, it makes sense that we take a little bit longer to make sure that we have the right product, particularly with this transition towards the mass market.”
In November, Wynn Macau Ltd. announced it would delay the opening of its US$4.1 billion Wynn Palace by 90 days, and additional delays may be possible; Wynn blamed the delays on his construction firm.
Despite the situation in Macau, MGM Resorts Chairman and CEO Jim Murren says the company overall is doing big business. According to the Las Vegas Review-Journal, Aria at CityCenter in Sin City enjoyed cash flow of $106 million in the most recent quarter, making it the best quarter in the development’s history. “I want to clear up any confusion,” Murren said at the beginning of an earnings call with analysts. “It was a great quarter for MGM and for the year.”
And Sheldon Adelson, chairman and CEO of Sands China Ltd., told analysts he is “confident that the Parisian Macao will both replicate the success of the Venetian Macao as another themed, iconic and must-see integrated resort destination for Macau’s visitors, while expanding the overall business and leisure tourism appeal of Macau.”
Gaming revenue in the jurisdiction picked up in the aftermath of Chinese New Year, according to Bernstein analysts. They say GGR for February should come in at up to MOP 19.7 billion (US$2.6 billion), for a slight year-on-year decline.
