Melco Resorts CEO Lawrence Ho cites the ongoing trade war between the US and China for a down year in the Chinese gambling enclave of Macau to be responsible for what he calls a “down year”. In October, the gaming revenue in Macau dropped by 1.8 percent. If the tread continues through November and December, then licensed gaming operators in Macau will generate an income of $37.1 billion in 2019.
Ho told CNBC that the trade war between the US and China is having a great impact on how people spend. According to the Macau Government Tourism Office, 30.2 million people visited the enclave in September. That represented 17 percent increase compared to the same month in 2018. However, they still recorded a decline in gaming revenue.
Robust Bottom Line
While Macau had relied on high-end visitors, the opening of Hong Kong Macau Bridge has enabled the influx of non-VIP to Macau casinos. Ho says the increased visitation has enabled Melco to increase its bottom despites reduced casino win. Ho also hopes that the opening trade between the US and China will happen soon.
“I think that’s going to give a lot of confidence to the traveling consumer, that there is an end to this thing. Also, a stabilization of the renminbi. I think these are all positive impacts for Macau,” the gaming tycoon added.
Melco resorts own three integrated resorts in the Philippines, Cyprus, and Macau. The operator is desperate to add a fourth one in Japan.
Melco is competing against Las Vegas Sands, MGM Resorts, Wynn Resorts, Hard Rock, and Galaxy Entertainment for an integrated resort license in Japan. Melco resorts also focus on Yokohama, Japanese second-largest city, and plans to invest billions in the region. While Las Vegas Sands and MGM remain favorites, Ho believes that Melco has a better chance of meeting Japan’s goals of legalizing the property.
According to Casino.org, Melco resort has announced an investment in non-gaming in Japan. The company plans to build a hot spring resort in Hakone and a ski resort in Nagano.