Macau Billionaire Lawrence Ho Blames US-China Trade War for ‘Down Year,’ Optimistic on 2020
Posted on: November 19, 2019, 01:00h.
Last updated on: November 18, 2019, 12:08h.
Billionaire Melco Resorts CEO Lawrence Ho says the ongoing trade war between China and the US is most responsible for what he calls a “down year” in the casino enclave.
Through October, gross gaming revenue (GGR) in the Chinese Special Administrative Region is down 1.8 percent. If that rate persists during the final two months, Macau’s six licensed casino operators will win around $37.1 billion in 2019.
“We’re going to have a down year, for sure,” Ho told CNBC. “But it’s as expected with the US-China trade war, renminbi devaluation. It is certainly having an impact on … how much people spend.”
Visitor arrivals are actually surging in 2019, with the Macau Government Tourism Office saying 30.2 million peoples ventured to the enclave through September. That’s a 17 percent premium on the same ten months in 2018.
Ho is the son of Macau “King of Gambling” Stanley Ho, whose SJM Holdings enjoyed a monopoly on gaming in the region for decades before the enclave was returned to Chinese control.
Robust Bottom Line
Macau casinos have given more attention to the mass market as visitation from the demographic increases. The opening on the Hong Kong-Zhuhai-Macau bridge makes the casino hub more accessible for non-VIPs.
Ho says the influx has allowed his Melco Resorts to actually increase its bottom line despite reduced casino win.
On the higher end of the business, the spend-per-visit is a little bit lower,” Ho revealed. “But I think for most operators, and especially Melco, our bottom line has been very strong. That’s thanks to the … bridge and having the benefit of that for the full year.”
Ho said he hopes media reports suggesting a first phase of a trade deal between China and the US will happen soon.
“I think that’s going to give a lot of confidence to the traveling consumer, that there is an end to this thing. Also, a stabilization of the renminbi. I think these are all positive impacts for Macau,” the gaming tycoon added.
Melco Resorts owns three integrated resorts in Macau, another in the Philippines, and soon Cyprus. Ho desperately hopes to add another country to that list: Japan.
Like Las Vegas Sands, MGM Resorts, Wynn Resorts, Hard Rock, Galaxy Entertainment, and most every other major casino operator, Melco is focused on winning licensure in Japan. The Asian nation is in the lengthy process of issuing three IR licenses.
Melco is targeting Yokohama for its multibillion-dollar project. Japan’s second-most-populated city is a major commercial hub in the Greater Tokyo Area. Ho said he’s in Japan almost weekly.
Ho explained that unlike the frontrunners – Sands and MGM, who are respectively targeting Tokyo and Osaka – Melco is better-positioned to meet Japan’s goal of legalizing the properties.
“We understand the Japanese government, part of their strategy for integrated resorts is to introduce people to regional Japanese cities,” Ho stated. “Cities that are less-visited. Of course, everyone goes to Tokyo or Osaka. Our fund is really targeting more rural cities.”
In addition to its Yokohama casino effort, Melco recently announced two non-gaming investments in Japan. The country plans to build a hot springs resort in Hakone, near Tokyo, and a ski resort in Nagano.
Related News Articles
Similar Guides On This Topic
Related News Articles
July 29, 2022 — 3 Comments—