Melco Relaunches Studio City in Q1 2024 Following the Record Casino Performance
Lawrence Ho Yau Lung, chairman and chief executive of the casino operating group Melco Resorts & Entertainment Ltd announces that the group’s Macau complex Studio City will be launched in the first quarter of 2024 or early in the second quarter. The launch will reportedly represent the Phase 2 of the facility re-opening following the September launch of the Melco’s W Macau hotel. As reported, the announcement comes after the opened part of the Studio City complex and the group’s Macau flagship City of Dreams both recorded all-time high revenues in October 2023.
Ho Yau Lung reportedly said: “We’re very excited about Studio City Phase 2. But the reason we’ve opened this kind of piecemeal is we’re gradually rolling more and more product into the market.” As reported by GGRAsia, CEO said that the property still needs major renovation work expecting that most of the retail facilities will open over the next two or three months. David Sisk, chief operating officer of Macau resorts, reportedly added: “The W also skews to a much different demographic and is particularly popular with women. This, hopefully, over time, will allow us to continue to expand our database.”
Record Revenue Levels Reached in October:
The company’s representatives used the recent press conference to inform that Studio City casino gaming floor produced ”an all-time high in the history of the property,” according to the source. The group’s Macau flagship City of Dreams hit the same record as the sister property. Therefore Melco seems to be looking to take advantage of the trend and announces that the popular show The House of Dancing Water will relaunch “probably late in the fourth quarter of 2024,” as Sisk reportedly said.
$2.5 Million Daily Cost:
Increased operations require increased investments. Geoffrey Davis, Melco chief financial officer, reportedly said that the relaunch would add around US$100,000 to group’s daily costs. He also said that the operating costs of the group’s Macau business increased to around US$2.5 million per day in Q3 or around US$100,000 more than in Q2 2024. As GGRAsia reports, CFO explained that the increase was due to “addition of full-time employees across [Melco] properties, including the opening of the W Macau in September and increased marketing costs.”
Davis also said that the company’s EBITDA nevertheless increased over the third quarter and reportedly expects that the group’s daily operating costs will arrive at the figure of US$2.6 million in Q4 2023. At the same time, Davis reportedly said that the company expects to maintain the cost saving trend of 20 to 25 percent achieved during the pandemic.
Repaying Dues To Accelerate Growth:
As reported, he also stated that Melco ”repaid US$100 million in debt during the third quarter of 2023 and repaid another US$100 million at the end of October.” As for the outstanding debt, CFO added: “We currently have approximately US$1.2 billion drawn on our revolving credit facility, which gives us around US$750 million of undrawn and available committed revolving credit facilities. We will continue to closely monitor our free cash flow, which will drive further debt reduction.”
As the market recovers and gradually exceeds the 2019 levels, Melco is looking to add around 900 rooms at Studio City to combine accommodation resources with those of its new Epic Tower and the W Macau hotel to host more players and accelerate the growth as much as possible.
