Melco Resorts CEO Lawrence Ho Says Macau Sold Out for Lunar New Year, Analyst Fears Overblown
Posted on: January 24, 2019, 09:58h.
Last updated on: January 24, 2019, 09:58h.
Billionaire Lawrence Ho, the founder and CEO of Melco Resorts, says his Macau properties are sold out for next month’s Lunar New Year holiday, and analyst concerns regarding the enclave’s 2019 gaming industry outlook are overstated.
Speaking with Bloomberg this week, Ho said the economy in the world’s richest gambling hub remains strong. And he says analysts who have forecasted a slight gross gambling revenue (GGR) downturn in 2019 are wrong.
The global economy has started to weaken but at the same time, China mainland where we depend on heavily, has been aggressively loosening policies, asking banks to facilitate more liquidity to small and medium businesses,” Ho explained. “The overall consumer sentiment is still okay.”
The son of Stanley Ho – whose SJM Holdings controlled a gaming monopoly on Macau until Portugal returned the enclave to China – says the February Lunar New Year will be a prime example of the economy’s resiliency.
“This Chinese New Year, we will definitely see business growth,” Ho stated. “Overall, it’s better than last year for us.”
The Chinese New Year – also referred to as the Spring Festival – is a week-long holiday in the People’s Republic, and creates the largest annual mass human migration in the world. Traded on NASDAQ, shares of Melco Resorts climbed more than four percent following Ho’s optimistic remarks.
Ho, like every CEO of a major casino operator, remains focused on Japan and its forthcoming gaming industry. The Asian nation is in the process of setting its regulatory standards, and is expected to begin the bidding process for three integrated resorts later this year.
It means everything for us. The opportunity is priceless and we’ll do everything that’s possible,” Ho declared.
Ho believes Melco Resorts’ strong track record with premium guests and its “huge Chinese database” positions the company well for licensure. Japan is considered the greatest opportunity in the gaming industry since Macau began authorizing additional casino operators in the mid-2000s.
One of the wealthiest countries in the world, revenue projections regarding Japan’s gaming industry are as high as $16 billion a year. By comparison, Nevada, the US’ richest casino state, won $11.5 billion in 2017.
With only three casinos, all of which will charge a ¥6,000 (US $55) entrance fee on citizens, and the Japan gaming market will be no Macau. The enclave’s six casino operators won $37.5 billion in 2018, the highest mark since 2013.
Macau’s rebound comes despite reduced VIP play, a result of Chinese President Xi Jinping’s clampdown on junket operators that bring mainland high rollers to the enclave. Casino operators like Melco refocused from the affluent traveler to more of the mass market.
Ho says the company will soon begin its $1.4 billion construction of Studio City phase two. The investment will create, according to the billionaire, one of the world’s largest indoor water parks. It will continue the integrated resort’s Hollywood theme.
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