Grand Lisboa Palace will focus on VIP in Macau, SJM's biggest $5 billion bet to date
Published: May 5, 2021, 07: 13 hrs.
Last updated: May 5, 2021, 07: 15 h.
The $5 billion Grand Lisboa Palace, SJM Holdings' first integrated casino resort on Macau's Cotai Strip, hopes to open before the end of June.
In the company's first quarter of 2021 this week, directors said they were still waiting for table games to be allocated from the Macau Gaming Inspection and Coordination Bureau (DICJ). SJM said it wants to have about 300 table games and more than 1, 000 slots when it welcomes its first guests.
300 - The target table is much larger than what DICJ typically allows for new integrated resorts. The gaming regulator's standard for new large-scale casinos is typically 150 to 200 table games available. SJM is aiming for more broadcast of table games due to its focus on premium segment and VIP junk.
"Premium mass operations and marketing are up and running, and the success of Grand Lisboa Palace largely depends on its ability to execute in this highly competitive segment," explains a note from financial Credit Suisse.
Late to Cotai
SJM Holdings is the casino empire of the late Stanley Ho, the so-called "king of gambling". Ho had a monopoly on gambling in Macau casinos for decades, which made him a billionaire many times over. . Another late billionaire - Sheldon Adelson and his Las Vegas Sands - turned Macau into the richest casino market in the world by expanding into Cotai.
Macau's five new commercial casino license holders - Sands, MGM Resorts, Wynn Resorts, Galaxy Entertainment and Melco Resorts - all watched Adelson to Cotai. Adelson wanted to build a Chinese version of the Las Vegas Strip and did that and much more.
Today , Cotai Strip is home to 10 integrated casino resorts. It is also the place to go for the highest of rollers in Macau. However, SJM is only now entering Cotai with its Grand Lisboa Palace.
Analysts are skeptical SJM will be able to capture significant market share in Cotai anytime soon.
Competition at Cotai is very strong and the product offerings are very competitive. Marketing prowess, loyalty programs and service levels are also likely to remain strong (and better) at many other properties, "declare analysts at Sanford C. Bernstein.
"We don't expect Grand Lisboa Palace to even get its fair share of Cotai (at least in the first few years)," - added the remark.
Profit for Q1
SJM Holdings told investors this week that it lost HK $ 647 million (1200 . 3 million) in the January to March period. Gross gaming revenue fell 29 percent to $ 310. 2 million, while total net income also fell 29 percent to $ 317. 9 million.
Despite the results, company representatives are optimistic about the company's prospects, which are heavily dependent on Grand Lisboa Palace's performance.
"SJM's results have recently started to respond to the resumption of leisure travel to Macau," said Ambrose So Shu Fai, vice president and general manager of SJM. "We look forward to further gradual improvement in market conditions for the remainder of 2021."