Galaxy Macau Expansion Budget Remains Unchanged, Investment Could Top $6B
Posted on: September 3, 2021, 11:17h.
Last updated on: September 3, 2021, 03:42h.
Galaxy Macau isn’t budging on its budget plans for the third and fourth expansion phases of its integrated resort complex on the Cotai Strip.
Galaxy Entertainment, the Hong Kong-headquartered gaming and hospitality firm, says the major expansions of its flagship property remain as planned, despite the economic fallout caused by COVID-19.
During a conference this week with Morgan Stanley Asia discussing the company’s outlook, Galaxy officials said the HKD40 billion to HKD50 billion (US$5.15 billion to $6.43 billion) price tag is “unchanged.”
Phase 3 is expected to open late this year or in early 2022. The expansion, which has been continually postponed for years, will add 1,500 hotel rooms to the complex, 430,000 square feet of new convention space, and an events arena capable of seating 16,000 people.
Galaxy Entertainment owns and operates Galaxy Macau, plus the adjacent Broadway Hotel, which is tailored towards families. The company’s holdings include the StarWorld Hotel in downtown Macau. Both Broadway and StarWorld are non-gaming resorts.
In May, Galaxy folded on its ambitions in Japan.
Galaxy Macau opened in Cotai in 2011 at a cost of $2 billion. Along with the adjacent Broadway Hotel, the complex features more than 3,700 hotel rooms and a vast casino floor measuring some 400,000 square feet.
The destination has long been planned to become even larger. But a variety of impediments have stalled progress.
Galaxy officials originally planned to have Phase 3 completed and open by the end of 2019. But China’s crackdown on VIP junket groups, which drove gross gaming revenue (GGR) from $45 billion in 2013 to less than $29 billion just two years later, slowed Galaxy’s enthusiasm for the expansion.
High rollers slowly returned, and a concerted mass-market focus among casino operators in the enclave resulted in GGR climbing to $37.8 billion in 2018.
Galaxy moved forward with Phase 3, but construction was halted in early 2020 after an accident killed three labors. Soon after work resumed, supply chain disruptions caused by COVID-19 brought the development to a standstill.
Galaxy says its Phase 3 and 4 expansions are focused on the mass market customer.
Galaxy Entertainment said in its interim 2021 report that despite the operating struggles in Macau caused by the pandemic, the group is positive about the Chinese enclave.
Galaxy Entertainment Group continues to remain confident in the medium to longer term outlook for Macau,” the corporate report explained.
The company’s ongoing development commitments come as Galaxy and the five other commercial casino operators in Macau are set to enter the 2022 public consultation and gaming concession re-issuance process. Galaxy discussing its current and future Cotai projects signifies that the group believes it will receive new operating rights.
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