Melco Resorts and Entertainment Chairman and CEO Lawrence Ho says he expects the company to post significantly improved results in 2Q19, describing the recent May Golden Week period as “one of the best we’ve seen in the last five years.”
His comments follow the release of Melco’s first quarter results earlier this week, which saw growth at the company’s Macau properties come in slightly below the market despite increases in operating revenue and Adjusted EBITDA at flagship City of Dreams.
Although he didn’t reveal any numbers, Ho stated in Melco’s 1Q19 earnings call that “for April and at least for May Golden Week we’ve seen very, very strong growth and strong volumes, so it’s probably been one of the best May Golden Weeks we’ve seen in the last five years.
“I think we are finally starting to reach the potential that we had expected for Morpheus. So, it took a bit longer than we had expected, but it’s been a journey and we are getting there. If anything, in April and May, we’ve seen some very encouraging times.”
Melco is in the midst of a major revamp of City of Dreams, which included the opening of Morpheus in June 2018 and transforming the second floor gaming space that was previously home to PokerStars LIVE Macau into new junket space.
Ho said that Melco would invest a further US$50 million of “targeted enhancement CapEx” over the next 12 months to further upgrade both the gaming areas and the non-gaming attractions at City of Dreams, including the transformation of The Countdown Hotel into a new hotel brand, Libertine.
City of Dreams Property President Davis Sisk said that construction disruption from the ongoing upgrades has continued to impact Melco’s bottom line in 1Q19 but said the recent launch of new junket space has “seen really good pickup” throughout April and into May.
“We’ve been very, very pleased,” Sisk said. “If you talked to a lot of the junket operators, they will probably tell you we have some of the nicest and finest space, not only in Macau but probably in all the world.
“So we’ve seen a great pickup through the April period and we saw some super good play on both on premium direct and our VIP operators throughout the first five days of May.
“I think it’s somewhat serendipity in terms of our timing with this. We’ve hit the market in a really good period of time with our product.”
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