Boosting its VIP business will be a key focus of MGM China when it launches its new Macau property MGM Cotai this year, the company has revealed.
MGM released its 2017 Annual Report on Tuesday, confirming its intention to open MGM Cotai before the end of the year which it says will provide a much-needed opportunity to win back market share. And although MGM Cotai has been widely promoted as a mass and premium mass property, the company says it will renew its focus on VIP play after seeing VIP revenue decline by 1.9% to HK$2.6 billion in 1H17.
“We expect to improve our competitiveness in the Macau market following the completion and opening of our new MGM Cotai property,” it said, adding that it will “pursue additional VIP business opportunities” for MGM Cotai and MGM Macau in the near future.
“We continue to review our business relationship with each of our gaming promoters and identify potential gaming promoters to grow our VIP business.”
MGM China said that although it had lost VIP market share during the six months to 30 June 2017, its in-house management team had been successful in recovering some receivables previously considered to be irrecoverable.
In a recent note following the announcement of MGM China’s 1H17 results, brokerage Sanford C Bernstein said it was “concerned about the company’s ability to fully defend its position over the next few quarters until the opening of MGM Cotai in Q4 along with a slow potential ramp up of MGM Cotai.”
In its annual report, MGM said its new property remains on schedule with “final cleaning efforts having commenced in multiple locations as has the installation of exterior LED video screens at the northeast and northwest corners of the property.
“The majority of all fit-out areas within the podium and tower are approaching completion with a significant effort now focused on detailed finish defect rectification and efforts related to completion and handover (including final testing and commissioning of building systems and network),” it said. “As a part of these final completion efforts, furniture and fixture installation is also continuing which will lead into operating supplies and equipment install at the final stage.”
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