The opening of SJM Holdings’ Cotai integrated resort, Grand Lisboa Palace, has been delayed again.
According to guidance provided by SJM during its 4Q20 and FY20 results announcement on Tuesday, the HK$39 billion (US$5 billion) project is now slated to open by the end of the 2Q21, dashing earlier plans to open by March.
Grand Lisboa Palace had originally been slated for completion in 2017 but has suffered multiple delays over the years.
There is also no guarantee the property will open its doors by June, with SJM telling analysts on Tuesday that the exact date remained subject to market conditions. The company currently has an excess of around 2,000 staff on payroll awaiting the launch of Grand Lisboa Palace.
SJM confirmed that final inspections are ongoing with an occupation permit likely to be issued in March or April, “which probably suggests a May/June opening, in our view,” according to investment bank JP Morgan.
“The gaming facility should open in one go, but we expect a staggered opening for hotels and non-gaming,” including the three hotel towers and their combined 1,900 rooms.
Brokerage Sanford C Bernstein added, “Inherently this is not the best opening strategy versus opening everything in one big effort. Partially openings have always led to significantly slower ramp up and less marketing impact.
“However, a full opening in current conditions is not feasible for GLP as the company will try to contain costs.”
SJM estimates daily operating expenses at Grand Lisboa Palace to be between HK$7 million and HK$10 million upon launch but will almost certainly increase as marketing spend increases.
“We expect GLP to have materially higher daily opex for a property of that scale,” Bernstein said.
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