Macau Casinos See Record Earnings as President Xi Lifts COVID-19 Restrictions
Posted on: November 9, 2023, 09:33h
Last updated on: November 9, 2023, 11:44h
Macau’s casino industry is experiencing a robust recovery from the COVID-19 pandemic, as President Xi Jinping’s decision to lift the “zero-COVID” policy has led to a surge in business. MGM Resorts International President and CEO Bill Hornbuckle reported during the firm’s third-quarter earnings call that the company’s subsidiary, MGM China Holdings, achieved record earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2023.
Hornbuckle stated that MGM China’s casinos are outperforming the rest of the market, with gross gaming revenue (GGR) returning to pre-pandemic levels. The company reported adjusted EBITDA of HK$1.9 billion ($240 million) for the quarter, surpassing the same quarter in 2019. MGM China’s market share in Macau has also increased from 14.8% to 15.5%, largely due to its success in the mass and premium mass segment.
As a response to the strong performance, MGM China announced plans to renovate both MGM Macau and MGM Cotai. The upgrades will focus on maximizing yield and enhancing the customer experience, including changes to the casino floors and the addition of new villas at MGM Macau. The company will also invest MOP16.7 billion (US$2.1 billion) into its resorts, with the majority of the funds allocated to non-gaming projects in an effort to diversify Macau’s tourism offerings and attract international visitors.
Kenneth Feng, president and executive director of MGM China, expressed enthusiasm for the recovery in Macau and the diversification development of the city. Additionally, Hubert Wang, MGM China’s chief operating officer, highlighted the resilience of high-income earners in China and emphasized Macau’s ability to cater to this demographic. Wang believes that Macau is well-positioned to capture the spending power of the upper middle class, further reinforcing the positive outlook for the city’s recovery.
Overall, MGM China’s strong performance in the third quarter signals a promising resurgence for Macau’s casino industry and affirms the region’s potential for continued growth and development.