MGM Resorts International appears bullish over Macau’s imminent return to growth, despite the ongoing collapse in gross gaming revenue, predicting a bounce in the market could come as early as this summer.
During a conference call with analysts, Bill Hornbuckle, acting CEO of the American casino operator, said that the group believes that the Macau market will rebound rapidly once the issuance of Individual Visit Scheme is restored and other restrictions are loosened.
Since the number of Covid-19 cases in Guangdong province has held stable in recent weeks, MGM expects that there are some opportunities for growth by early summer, providing that the flow of visitors resumes.
“We are hopeful that early this summer, given all the indicators and things we see in China, that, that market will begin to open up,” said the executive.
Grant Bowie, CEO and executive director of local operator MGM China, said during the investor call that he views the restoration of the visitor market as a two-step process.
First, he anticipates the lifting of Guangdong’s mandatory quarantine for all arrivals – described by Bowie as “return-to-China quarantining”. That should be followed by a restoration of the Individual Visit Scheme for mainland residents to visit Macau.
The casino executive also said he expects visitor traffic will remain subdued for the time being. That is less of a concern for MGM, he said, because “we think that the premium market will come back first [and] that’s obviously where we have that strength.”
“So we’re very positive,” added Bowie. “From our discussions with customers, the demand is there, the opportunity for them to travel is the only thing they’re looking for.”
On the investor call, Hornbuckle also disclosed that the MGM China properties are currently incurring cash operating expenses of approximately $1.5 million per day, “which is in excess of amounts being earned.”
However, he pledged that the group would continually to invest in its two local properties, MGM Cotai and MGM Macau.
“While we are currently focused on managing the current situation and driving efficiencies with our current footprint, we will continue to invest in our properties and expand our offerings, especially on non-gaming, with more suites and more room product,” said Hornbuckle. LV
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