The Londoner Macao’s ongoing major renovation has now decommissioned 3,000 hotel rooms, up from 2,500, causing a significant impact on the casino’s operations.
According to a note from JP Morgan, the parent company Las Vegas Sands confirmed that the renovation would have a more significant impact on the second quarter compared to the previous three months.
The analysts also reported that Las Vegas Sands was managing margins by redistributing table demand to other properties in its Macau portfolio, according to a GGR Asia report.
The renovation, known as Phase 2, had a hefty price tag of USD1.2 billion and included the renovation of the Sheraton and Conrad hotels, as well as the revamp of the Pacifica casino space.
This meant that the two Sheraton towers, with 4,000 rooms, were also affected. In the first quarter, the company’s management had already warned of the impact of the renovation, stating that about 500 to 600 rooms were out of commission due to the renovation of the first Sheraton tower.
However, the executive vice chairman of Sands China Ltd, Wilfred Wong, reassured investors that the projects were on track to be completed by the fourth quarter.
Meanwhile, the casino company was facing tough competition in the Macau market, with operators vying for patrons in the premium-mass segment. However, the company was confident in its position, noting that its reinvestment rates were higher than in 2019.
The company did not see the need to increase its reinvestment rate once the new casino, arena, and an additional 1,000 suites at the Sheraton were back online in the fourth quarter of 2024.
With the completion of the renovation projects, the company is confident its market position will improve by late autumn.
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