Melco Resorts & Entertainment has revealed it will move into the post-COVID era with around 2,000 fewer full-time Macau employees than in 2019 as part of its long-term cost saving initiatives – even with the opening of new hotel and non-gaming inventory at Studio City.
Speaking with analysts on the company’s 1Q23 earnings call overnight – the first quarter since border restrictions were eased in early January – Melco Executive Vice President and Chief Financial Officer Geoff Davis said cost savings continue to be a focus over the coming years as Melco looks to pay down US$7.9 billion in debt.
“We have been able to achieve significant cost savings over the last few years and this continues to be a focus as we hire staff to support the recovery,” Davis explained.
“We estimate that we will have approximately 2,000 fewer full-time employees compared to 2019 once we are fully ramped up, including the full-time employees needed for the opening of Epic [hotel], the W [hotel] and the water park at Studio City. We remain disciplined on cost management and expect to retain at least 20% to 25% on of the savings we achieved through the COVID period as permanent savings.”
Melco is, meanwhile, continuing to ramp post re-opening with the company expecting to have all Macau hotel rooms back online by the end of June.
Chief Operating Officer – Macau Resorts, David Sisk, said only around 70% of Melco’s hotel room inventory was open during Q1, while the April launch of Epic Tower at Studio City saw only 100 of the 338 suites available opened to guests. All 338 suites were open in time for the recent Golden Week, with the adjacent W Tower expected to launch in September, adding another 550 rooms to Melco’s Macau capacity.
According to Sisk, the launch of Epic Tower and the Studio City Water Park has aided a significant increase in gaming activity too, with table drop up around 40%.
“As we’ve opened it, we’ve seen really good feedback from our customers,” Sisk said. “It’s a nice product differentiation for Studio City. It strikes a really nice balance with the Epic tower between what we’ve dealt with Morpheus and what we have with Nuwa. It’s going to allow us to really grow our premium mass customers over at Studio City as well as taking advantage of all the attractions and things that we’ve developed over at Studio City over the last few years.”
Melco also confirmed it will open its €550 million City of Dreams Mediterranean property in Cyprus in mid-June.
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