Macau gaming developer Melco Crown Entertainment said on Tuesday it expects the Macau market to rebound from a sharp contraction. It is also monitoring expansion opportunities in Taiwan’s emerging casino market.
“The worst period for Macau’s tourism industry is probably over,” said Lawrence Ho, co-chairman of Melco Crown Entertainment. The company added it is on track to open its City of Dreams integrated resort on the Cotai strip by early summer.
Short term hopes—recently dashed—that Beijing would ease visa restrictions and a global rebound in equities from multi-year lows helped Melco shares rise around 70 percent in the last three months, though the stock is still down nearly 80 percent over the last year.
“2009 should get gradually better,” Lawrence Ho told reporters in Macau.
Mr Ho said 7,000 new jobs would be created in the first phase of the USD2.1 billion City of Dreams on the Cotai Strip. Melco Crown and Wynn are the only two casino operators adding new capacity in Macau over the next 18 months.
Mr Ho added Taiwan’s move on Monday to legalise gambling on its offshore islands represented a possible opportunity for Hong Kong-listed Melco, which has a joint venture in Macau with Australia’s James Packer.
“We are interested in the [Taiwan gaming] market, but we have to do further studies into the political environment there,” said Mr Ho.
“Our main consideration is to check there’s no impact on Macau… the Taiwan market could be very large, yet because it’s not on the [Taiwan] mainland, but an outlying island, we’ll have to study how to set up the infrastructure,” he said.
Mr Ho said, however, the tough economic conditions meant bank financing for even a mid-sized resort there would likely remain difficult in the next one or two years.
Despite Melco’s bullishness, some analysts still take a dim view of Macau’s gaming prospects in the short term.
