Macau concessionaire SJM Holdings has reached an agreement with its parent company, Sociedade de Turismo e Diversões de Macau, S.A (STDM), to revise upwards the maximum SJM can pay for the use of STDM-owned hotel rooms under a Services Master Agreement first signed late last year.
This is the second time the agreement has been revised in 2023, with SJM citing the “strong growth in visitor arrivals leading to strong growth in occupancy at the STDM Hotels during the first three quarters of 2023.”
Under the revised agreement, SJM will pay STDM a maximum of HK$65.0 million for Hotel Accommodation Continuing Connected Transactions to be provided by STDM to the group in 2023, up from a previous high of HK$47.3 million. This is despite the aggregate amount paid for the first nine months of 2023 reaching only HK$29.5 million.
While this nine-month total represents 62.4% of the existing cap, SJM said the actual amount for hotel accommodation had been increasing throughout 2023, from HK$4.6 million in 1Q23 to HK$8.2 million in Q2 and HK$16.7 million in Q3.
The revised agreement specifically relates to the amount payable by SJM to the hotels owned by the STDM Group, including Hotel Lisboa Macau, Hotel Sintra Macau, Grand Coloane Resort and Artyzen Grand Lapa Macau for hotel room charges attributable to the Group’s selected gaming patrons and guests.
It does not relate to SJM’s self-run casinos in Casino Grand Lisboa Palace, Casino Grand Lisboa, Casino Lisboa, Casino Oceanus at Jai Alai, or to the nine satellite casinos operated by third parties under SJM’s license.
Outlining the reasons for revising the cap, SJM said, “In view of the strong growth in visitor arrivals leading to strong growth in occupancy at the STDM Hotels, the existing Annual Cap for the year ending 31 December 2023 is revised with reference to the following factors: (i) actual transaction amount for hotel accommodation services; (ii) expected growth in gross gaming revenue and visitor arrivals in Macau for the final quarter of 2023; (iii) expected additional demand for hotel rooms of STDM Hotels for the year ending 31 December 2023 arising from the Company’s strategy to keep the patrons staying longer than usual and increase the client base by providing additional hotel accommodation services to their clients; and (iv) a buffer for inflation and unanticipated demand for hotel accommodation services.”
The existing Annual Caps for the years ending 31 December 2024 and 2025 will remain unchanged, it added.
SJM said in October that it had also revised upwards a series of agreements with its own Co-Chairman and Executive Director, Angela Leong, in regard to the maximum amount it must pay to lease casino and retail space from her in the Jai Alai and L’Arc Hotel buildings.
