MGM Cotai may shoot for early 2017
U.S. gaming operator Wynn Macau Ltd. will not open its new US$4.2 billion Wynn Palace resort until the last week of August, according to information from investment bank Morgan Stanley and brokerage Union Gaming Securities Asia Ltd.
The dual reports, cited in GGRAsia, were a day apart in their estimated opening dates: Morgan Stanley said August 22, and Union Gaming said August 23.
Morgan Stanley analysts Praveen Choudhary and Alex Poon noted there will be possible “short-term stock outperformance between now and the expected Wynn Palace opening, similar to when Melco Crown Entertainment Ltd. and Galaxy opened their respective new casinos.”
The resort was originally set to open March 25. Due to construction delays, that date was pushed back to June 25. Union Gaming analyst Grant Govertsen said the company is also waiting on work permits for foreign laborers. And it’s still unclear how many table games the government may allow for the new casino. Last year, Steve Wynn went on a tirade against the Macau government, saying it was “outrageous” that operators on the verge of opening should be kept in the dark about their table allotment.
He was also undoubtedly frustrated that resorts that recently opened on Cotai, like Studio City and Galaxy Entertainment’s Phase II, did not get the number of tables they requested. The government has promised to enforce a 3 percent cap on new tables in the gaming mecca until 2022, when the last of the Macau casino concessions expires. According to Union Gaming, that means the city will get a grand total of 1,097 tables during that period, and CalvinAyre.com reported that 250 tables seems to be as much as operators can expect for Macau in the near future. Wynn has good reason to be vexed, according to a February report on the Motley Fool, each table generates well over $10,000 per day, or multimillions of dollars every year.
According to GGRAsia, Wynn Palace will include other attractions, such as a 1,700-room hotel, a large lake with fountain display and gondola rides, meeting space, a spa, shops, and food and drink outlets as well as a casino.
Morgan Stanley expects the Palace will “price itself at the higher end of the scale with limited discounting,” according to the Asia Gaming Brief, but may cut room rates if the occupancy rate is lower than expected.
Another resort set to open this summer is the ultra-luxurious Louis XIII, described by GGRAsia as a “boutique casino hotel” in development on the Cotai-Coloane border by Louis XIII Holdings Ltd. And the Parisian Macao, a Sands China entry, will open as scheduled in September.
“We will not slip; we will adhere to the schedule,” promised Sands China President and COO Wilfred Wong Ying Wai. The Parisian Macao will have approximately 3,000 guestrooms and suites, more than 150 shops, a 1,200-seat Parisian Theatre and 56,000 square feet of meeting space, as well as a replica of the Eiffel Tower.
But the opening of the 13 Hotel, also on the Cotai-Coloane border, has been pushed back to the fourth quarter of 2016. And brokerage Sanford C. Bernstein Ltd. says there is a “possibility” that the opening of MGM Cotai may “trickle into the second quarter” of 2017.
The recession in Macau drags on, meanwhile, with Union Gaming forecasting a decline in GGR of 11.5 percent year-on-year for 2016.
