Melco Resorts & Entertainment is seeing significant benefit from an increased focus on the premium mass gaming segment, management said Tuesday, with a clear goal of returning to the EBITDA and market share levels it enjoyed pre-COVID.
The company, in its 3Q24 earnings call overnight, outlined a raft of major premium mass-focused investments it has made to its Macau integrated resorts in recent months, including a relaunched loyalty program providing additional benefits to high-end customers.
“As part of this relaunch, we have introduced a new tier for our highest level of premium mass player that offers exclusive benefits and personalized experiences,” said Melco Chairman and CEO Lawrence Ho. The new “Emperor” tier includes villa stays, private jet use and executive protection services.
“This renewed loyalty program is starting to show the benefits of increasing efficiency in our player reinvestment,” Ho said.
Also launched during the September quarter were a Signature Club premium slot area at City of Dreams, a Dragon Zone at Studio City in partnership with Aristocrat Gaming and new activations at the entrances of both properties to enhance appeal.
Still planned is a revamp of Studio City’s high limited gaming area and the return of popular residency show The House of Dancing Water in 2Q25.
While it’s early days in Melco’s efforts to reclaim its share of the premium mass market, the company pointed to a strong Golden Week in October where mass drop grew by more than 20% year-on-year and saw multiple records broken. Specifically, City of Dreams saw three of its top 10 days all-time for mass drop and Studio City four of its top 10 days.
“So we’re very happy with it,” Ho said. “The hard work that we put in over the last couple of quarters since some of the management reshuffle is starting to pay off.
“A lot of the improved accessibility and new attractions really came online in late September, so I think we’ll continue to benefit from it as the quarter develops and as we continue to reinvest in the properties and the businesses and on the service, we’ll benefit from that over the coming quarters.”
Ho also pointed to significant upside in Melco’s potential with analysts noting that 3Q24 Adjusted EBITDA of US$323 million is around 70% of traditional Q3 levels. 3Q19 Adjusted EBITDA was US$418 million.
“There is significant potential [but also] a lot more work for us to do to get back to the 2019 levels, with the additional investments into Studio City Phase 2 and Cyprus,” he said.
“I’m confident that the last couple of quarters, the path that we’re taking, reinvesting in the service, in the quality of the business, re-establishing our brand promise and the brand quality, will ultimately take us back to the heights that we achieved back in 2019.
“Definitely there’s a lot of untapped potential that we haven’t quite reached and we’re hoping that 2025 is really going to be the year where all of the hard work will start paying off.”
In a note, CBRE’s John DeCree said Melco is making progress in upping its game in Macau, with a renewed focus on its highest-value customers.
“Ultimately, Melco is reinvesting in all of the right places to fight for share, especially in the lucrative premium mass segments,” he wrote.