MGM has plans to grow and build a south tower, but this is not a priority
MB March 2020 Special Report | Cotai 3.0 (2019-2022)
MGM’s IR in Cotai was one of the last to be inaugurated (February 2018) and one of the main features, The Mansion, opened its doors only one year ago.
Even so, three months after the inauguration, during an analyst and investor day, Grant Bowie, the chief executive of MGM China Holdings Ltd, mentioned a “new additional hotel tower [the south tower] of approximately 900 rooms” as part of an expansion for MGM Cotai.
It was also known that the build-out of the south tower will include an additional 100 suites, as well as the expansion of the existing podium to increase the number of restaurants, shops and entertainment spots.
No timetable or expected capital expenditure was provided for the project at that time (May 2018). But, two months later, Mr Bowie announced that the expansion of the MGM Cotai was “not likely” to be seen “until around 2021, 2022.”
“We’re starting on a very preliminary phase two expansion strategy,” the chief executive of MGM China said. “We’re now working through that in terms of product mix, product requirements, etc,” as, when developing the original MGM Cotai complex, MGM China had already “built foundations for expansion.”
During the Q1 2019 Earnings Call, Mr Bowie added: “we’re actually in the planning phases where we’re appointing architects. It’ll probably take us into the end of next year, it’s probably a 15-month to 16-month, 18-month, 17-month buildout.”
Is not clear at this moment if The Mansion, a high-end accommodation cluster aimed at VIP players and premium mass market, has all the 27 villas open, as last July the company said the last “seven will follow shortly.”
In parallel, MGM has been making some hits on its first Integrated Resort, opened in 2007 on the Peninsula, with plans to remodel the mass floor as well as to refurbish the property’s junket rooms.
“Despite the market share migration from the Macau Peninsula to Cotai, the effect on our revenues at MGM Macau was mitigated by our continuous efforts to improve the gaming experience of our high value main floor players in MGM Macau by renovating the dedicated exclusive gaming space for their use,” we read in one of the last interim reports. “We continued to reallocate tables from VIP gaming to our main floor gaming areas to maximize our yield. We leveraged our Golden Lion Club as a vehicle to attract and retain those high value main floor players through exclusive customer service and promotions.”