MGM to transform VIP areas into luxury accommodations

The Emerald Villa of MGM Cotai

MGM China Holdings Ltd is set to convert former VIP junket areas at its MGM Macau property into 28 villa accommodations, while transforming 200 hotel rooms at MGM Cotai into 88 luxurious suites.

This strategic move aims to enhance competitiveness against rival operators, according to a recent Goldman Sachs (Asia) Ltd report, following investor discussions in Macau.

The renovations at MGM are expected to be completed by next year, aligning with the introduction of high-end offerings from competitors like Sands China Ltd and Galaxy Entertainment Group Ltd.

Sands China Ltd. and Marriott International recently announced plans to welcome the first Luxury Collection Hotel in Macau.

Sands is also transforming the former Sheraton Macao into the suite-focused Londoner Grand, slated to open in the fourth quarter.

Meanwhile, Galaxy is preparing to launch the luxurious Capella hotel at Galaxy Macau in 2025.

Goldman Sachs also highlighted Galaxy’s plans to introduce a new premium slot area at Galaxy Macau by late September, just in time for the October Golden Week holidays, a peak period for Macau’s gaming industry. This year’s Golden Week runs from October 1 to October 7.

ëExceptional performanceí for MGM

At the Deutsche Bank’s 32nd Leveraged Finance Conference, Jonathan Halkyard, the Chief Financial Officer of MGM Resorts International, highlighted the “exceptional performance” of MGM China, which includes MGM Macau and MGM Cotai, over the past two years since the pandemic.

Despite holding only about 12.5% of the gaming tables and under 10% of the suites in the market, the company consistently achieves a market share in the mid-teens and impressive margins in the high 20s.

The topic of MGM’s promotional spending was also raised by rival Melco Resorts, whose president, Evan Winkler, suggested that there is a collective understanding among competitors regarding rational versus irrational promotional behavior, according to reports.

Halkyard also revealed plans for MGM China to invest approximately USD200 million in capital expenditures for 2024, focusing on commitments made during the re-tendering of Macau’s concessions in late 2022, with expectations for continued investment into 2025.