South Shore Holdings Ltd. appears to have more bad news as the company announced that their signature The 13 Hotel suffered heavier losses during the first half of this fiscal year than expected. This continues the resort casino’s woes, which since the project was first proposed, has seen nothing but pitfalls happen.
The loss in the six-month period ending on September 30 reached HKD506.7 million ($64.7 million), according to the company. That has been an increase of more than HKD60 million over the same period since 2018. The loss related to basic and diluted shares also increased, ranging for each instance from HKD0.437 to HKD0.50.
The company explained in a statement that the internal loss from hotel operations was “about HKD508 million” and was mainly due to financing costs for hotel operations, depreciation and amortization charges and other hotel operating costs recorded in the current period.
For years, the 13 Hotel has been a kind of albatross for South Shore Holdings. The company sold off 50% of its assets at the venue in early November when three firms joined to buy the resort’s half stake. This helped the company remove from the Hong Kong Stock Exchange the suspension that had been in effect for more than two weeks as the stock price had plummeted due to the resort’s financial battles.
Revenue from the company has never reached expectations. The resort finally opened at the end of August 2018, but for the six-month period ending on September 30 of that year, South Shore Holdings still posted a net loss of HKD433.63 million. That loss was 18 times greater than the company’s loss in 2017 over the same six-month period. Obviously, for The 13 Hotel, which proves that number 13 is really unlucky, things seem to be going backwards.
Six licensed casino operators are based in Macau. Each operates their own resort casinos and has partnered with several of the area’s resorts. None of them, however, expressed any interest in bringing their tables and slots to the area close to The 13. This has led to poor occupancy figures, as the hotel records an occupancy rate of only 8%. That means that only 16 of the resort’s 199 villas are occupied on any average night. This is a substantial loss for the company at a cost of HKD5,000 per night.
The company does not appear to be concerned, however. In a statement, they explained, “The hotel market in Macau continues to grow steadily, but the overall external economic environment is still posing uncertainty. The U.S.-China trade tension is expected to continue and raise uncertainty on the political and financial risks in the short-term, but it still looks optimistic in the long-term.”