Will it hurt Studio City?
Sands China’s newest entry in the Macau gaming market has seen strong visitation since it opened in mid-September, according to a note from Union Gaming.
“We think Parisian is the right product targeting the right market segments at the right time,” said the brokerage of the new property, which has many attractions designed to bring in mass-market patrons and gamblers.
“The property has generally exceeded our expectations, and most importantly seems to hit the sweet spot of what a typical mainland mass market visitor generally responds well to—a sense of grandeur, massive scale and European highlights,” the firm continued.
The Buckingham Research Group reported that Sands China did a better job marketing its new $2.4 billion property than Wynn Resorts did with its $4.2 billion Wynn Palace, which opened in August.
“The awareness of the Parisian among gamblers was high, with Sands having blanketed the region with social media impressions of the new property over the last couple months,” analyst Christopher Jones told GGRAsia.
Foot traffic has been brisk at the resort—and that’s a plus for Sands China’s other properties on the Cotai Strip, Union Gaming said. “The volume of foot traffic between Venetian and Parisian and between Cotai Central and all three SCL properties on the west side of the Cotai Strip (including the Parisian, the Four Seasons and the Venetian) is many multiples of the volume of foot traffic between Parisian and Studio City,” the note explained. “Based on multiple observations, we consistently observed more persons walking to Parisian from Studio City than to Studio City from Parisian—in other words, a net migration towards Parisian. The bottom line is that Parisian seems to be significantly more compelling than Studio City from a mass market consumer perspective. Should these trends be maintained, Parisian could prove less of a benefit and more of a headwind for Studio City.”
Market-wide in Macau, GGR was “weaker than expected” the week the Parisian opened, said brokerage Sanford C. Bernstein Ltd. “However, the week’s results were still over 15 percent above the similar week last year,” the team wrote.
Jones predicts GGR for September will be “flat” compared to the prior-year period. But the opening of two new resorts could enliven a historically slower period at the end of the month, as the city prepares for Golden Week in October.
Many hotels in the city say they’re 80 percent booked ahead of that national holiday, which begins October 1, according to Macau Business.
When it comes to Macau, incidentally, “Mad Money” TV host Jim Cramer saw the 1.1 percent increase in gambling revenue for August as a positive sign for investors.
“But if you’re looking for a singular moment to call the bottom of Macau, it wasn’t the recent pickup in August numbers—it was on January 19, when Steve Wynn disclosed that he bought a million shares of his own stock,” Cramer said.
“The stock market is basically a prediction machine that forecasts what’s going to happen roughly six months into the future, and it predicted this pickup in Macau,” he added. Cramer likes both the Wynn Palace and Parisian Macao, and said, “If, like me, you believe that Macau is ready to bounce back, then both stocks have more room to run.”
