MGM launches major upgrades at resorts to strengthen market position

MGM China is embarking on a series of significant upgrade initiatives across its two integrated resorts in Macau, aiming to solidify its market share in the competitive mid-teens range following a record-breaking quarter.

In an earnings call with analysts, the gaming operator announced the group is investing heavily in capital expenditure projects at both MGM Macau and MGM Cotai.

The company plans to expand its premium gaming area and renovate its villas at MGM Macau, with completion expected by mid-2025, which will increase the total suite count by 25%.

At MGM Cotai, about 160 standard hotel rooms are being transformed into 60 luxurious suites, set to be available by the end of next year.

These enhancements are designed to protect MGM’s position in the premium mass market and foster organic visitation.

“We are expecting all these projects to be completed by the middle of next year. So once all these projects are finished, we all believe we are going to continue to lead our Macau market, said Kenneth Feng, president and executive director, MGM China.

“For our Cotai suite conversion project, we are expecting to finish by the end of next year.”

In addition to these renovations, MGM China is set to launch a new show, “MGM 2049,” by the end of the year.

This production is directed by the acclaimed Zhang Yimou, known for his work on the 2008 Beijing Olympics opening ceremony.

As part of its commitment to enhancing cultural offerings, MGM China is also developing a new poly museum at its property in the Macau Peninsula.

Record-breaking Q3

MGM China has announced a record-breaking performance for the third quarter of 2023, marking a milestone in the company’s growth trajectory.

With net revenues soaring by 14% year-on-year and adjusted property EBITDAR increasing by 5%, the company achieved a margin of 26%.

Adjusted earnings before interest, taxation, depreciation, and amortization (EBITDA) totaled HKD1.98 billion, reflecting a 5% increase compared to the same period last year.

However, this figure represents a 19% decline from the second quarter of this year, according to a recent filing.

For the period from July to September, net revenue reached HKD7.96 billion, which is a 14% rise year-on-year.

The market share for the quarter was 15%.

The driving force behind this growth has been robust mass market volumes and the performance during the Golden Week, which saw volumes rise 20% compared to pre-pandemic levels in 2019.

“Our team continues to perform at a high level, and we remain confident in our long-term ability to sustain market share in the mid-teens,” said Bill Hornbuckle, president and CEO of MGM Resorts.