Melco Resorts Chairman and CEO Lawrence Ho says the company has seen a clear slowing in VIP play as well as lower spending by premium mass customers through October and early November.
The comments, which are in line with analyst predictions of a significant decline in VIP revenues for Macau’s operators through late 2018 and into 2019 after more than two years of strong growth, were made during Melco’s 3Q18 earnings call.
Asked specifically about gaming trends since Golden Week in the first week of October, Ho said, “I think with what’s been happening in the geopolitical and in the macro sense with the trade war and everything, VIP has fallen. In terms of VIP, growth has certainly has fallen faster than we had expected. And this is in discussions with our junket and also with our own premium direct VIP team.
“We are seeing some weakness compared to the growth that we were seeing in the first two quarters of the year.”
On premium mass, Ho added “we have strong visitation … but in terms of the average spend per visitor, it’s not what it once was.”
Nevertheless, Ho pointed to the May launch of luxury hotel Morpheus at City of Dreams as having aided the premium segment at Melco’s flagship property, where VIP rolling chip volume grew 9.8% year-on-year to US$12.3 billion in the three months to 30 September 2018.
He also revealed that City of Dreams had opened one new VIP Club in recent months while construction of new VIP rooms on the second floor space previously occupied by PokerStars LIVE Macau would be complete within six months.
“We’re extremely happy that Morpheus is ramping up very nicely, with almost 100% occupancy every night,” Ho said. “And we have more and more guests experiencing those rooms.
“At the same time we’re still positive on, in terms of the rest of the segments, our slot and mass which is still very strong. And I think we stand to reap the benefit of Morpheus and some of the new offerings that we have at Studio City.
“So I think all in all, we’re … cautiously optimistic for the short and midterm and super bullish for the long term.”
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