By Ben Blaschke
Melco Resorts Chairman and CEO Lawrence Ho says that a recent management shake-up across the company’s Macau and Manila properties was aimed at stemming the loss of premium players to rival operators.
Detailing the raft of changes, announced in January, during the company’s Full Year 2017 earnings call on Friday, Ho said that the new appointments were focused primarily at bringing top players back to City of Dreams in Macau after net revenue at its flagship Cotai resort fell 7.3% in the 12 months to 31 December.
The management re-shuffle saw former City of Dreams Property President Gabe Hunterton depart, with Studio City Property President David Sisk taking his place at City of Dreams and former City of Dreams Manila President Geoff Andres returning to Macau to take over Studio City. Kevin Benning – former Vice President of Gaming Operations at City of Dream Manila – was promoted to Senior Vice President and Chief Operating Officer at City of Dreams Manila in place of Andres.
“At the end of the day … our decline in our mass hold rate and our mass GGR was really a function of some of our top players trying other properties,” Ho explained.
“We recognized that at City of Dreams, which is our flagship property, in terms of our really core business which is mass and premium mass, that we weren’t keeping pace with the market and ultimately we benchmark ourselves at the highest level of that segment.
“What I had then identified previously was that there was a leadership issue and the fact of it is, as senior leaders of the company, we need to get the best of out of our people and have all of our teams work together in unison.
“I felt that the prior Property President couldn’t get the team to be at their best and what I have seen with David at Studio City in his 1.5 to two years with us is that he really pulled the team together and he runs the operations very meticulously – and we’ve seen drastic improvements at Studio City. That’s the reason why we made the management reshuffle.”
Sisk said that preventing the loss of premium players was his first priority at City of Dreams, adding that he had already begun making significant changes to his staff and the layout of certain gaming areas.
“One of the first things is that we have to stop the leakage of our premium players,” he said. “Obviously, they’re going to go out and they’re going to sample, whether it’s Wynn Palace or MGM or the other properties out there, and we have done not so good a job of getting them back.
“Part of that, I think, is to do with the motivation of our sales team and our sales staff, so part of what we’ve done in the first couple of weeks is to bring back some of the sales leadership. We brought back some of the sales people and we’re looking to try to bring in additional sales people now that left us over the last 12 months, get them back in and get them back to our family here and get them focused on building those relationships with those players and getting them back more frequently.
“What we’ve also done is take a hard look around the property and said, ‘You know, we don’t need certain sections there.’ So we’re taking out that middle section which really blocks one of the sight lines. We’re in the process now of taking that out.
“We’re looking to brighten and lighten the casino and really try to contemporize it more. We are adding some smoking pods on the floor which really does help us and kind of centralizes and encourages more play, as people don’t have to get up and go too far away to go grab a cigarette. They can watch the trends and get right back to the games.
“So again, as we look at this, we are just trying to really kind of energize the team and the staff there. People seem to be understanding what we’re trying to do. I think it’s only been a couple of weeks but we’re pleased, I think, in terms of where we’re headed.”
Ho said he was particularly pleased with the fact that all of Melco Resorts’ new management appointments had been internal. But he pointed out that the real key to recovery at City of Dreams would be the launch of luxury hotel Morpheus, currently scheduled to start operations in May.
“The opening of Morpheus cannot be understated because Morpheus is effectively helping us relaunch City of Dreams after the property has been open for nine years,” Ho said.
“There is significant work ongoing, in the casino floors, in the retail areas, in all common areas right now at the City of Dreams – and the whole goal is so that Morpheus can be a significant catalyst when it opens in adding hotel room capacity and getting the best customers back.”