The opening of MGM Cotai could possibly be further postponed to the second quarter of next year, according to the latest report released by brokerage Sanford C. Bernstein.
“MGM China expects to complete all the government processes by the end of this year and maintains its target date of late [-first quarter of] 2017, though there is the possibility that the opening may trickle into [the second quarter],” the investment firm wrote, after attending MGM Resorts International’s Analyst and Investor Day presentation last week.
The HK$24-billion (US$3 billion) new project of MGM was originally slated to be unveiled at the end of this year, but this February the company announced that it would postpone the opening until the end of the first quarter in 2017.
At the beginning of May, speaking on a teleconference for the company’s results for the previous quarter, the Chief Executive Officer of MGM China, Grant Bowie, said that the construction of the Cotai project was estimated to be completed at the end of this October or early November.
According to the Bernstein report, the gaming corporation has also decided to delay the buildout of four floors in one section of the building, which were originally designated for a casino and restaurant.
“MGM has decided to determine the use of the space at a later point in time, depending on market conditions,” analysts Vitaly Umansky, Simon Zhang and Clifford Kurz wrote.
They added that the management of the gaming operator expected that most of the facilities in MGM Cotai would be operational at its opening, but not its mansion, which would only be completed two to three months after the opening.
Increased room supply not a problem
According to the report, the MGM China CEO is not worried about the increasing supply of hotel rooms in the territory in the coming years, as it is exactly what the city needs.
“Despite an additional [some 14,000] or so of room inventory that will be added over the next few years , [Mr. Bowie] believes Macau is still critically undersupplied in terms of room capacity – especially when we compare Macau’s [around 30,000] hotel room supply to Las Vegas’ [some 150,000] rooms,” the analysts wrote.
Mr. Bowie believes the increase in local hotel room supply will actually help to increase the number of overnight visitors to the city, in addition to further driving the local MICE business that would support mid-week occupancy, the report reads.
