The Chairman and CEO of Melco Resorts & Entertainment, Lawrence Ho, said Wednesday that the company’s Studio City Phase 2 development would open in stages, with the first stage to include a single hotel tower and indoor water park sometime during the June 2023 quarter.
This will be followed by the launch of remaining facilities in 3Q23, according to details contained within Melco’s 4Q22 results announcement. It was also revealed that the company is looking to employ around 1,000 new staff across its Studio City Phase 2 development – primarily to work at the indoor water park and both hotel towers, to be known as the Epic Tower and W Tower.
However, Melco was quick to tout a greater focus on cost controls since the COVID-19 pandemic, with Chief Operating Officer, Macau Resorts, David Sisk, noting it will have 100% less FTEs (full-time equivalent worker hours) at the end of 2023 when compared to the same period in 2019.
“We’ve really done a good job of rethinking how we operate our business,” Sisk said. “We’re much more efficient with what the things that we’re doing now. We’re really happy with the leverage that we’re going to get out of that and the flow through that will get to the bottom line.”
In an analyst call following Melco’s 4Q22 results release, Ho also provided some color around the government-mandated allocation of 750 gaming tables and 2,100 electronic gaming machines under the company’s new concession contract.
This represents 196 fewer tables, a 21% reduction, on the total Melco held under its previous agreement, but Ho explained this was “exactly the number of tables we requested according to our investment proposal.”
“So in our minds, we didn’t lose tables,” Ho said. “Before the new concession, we had 900 tables but 300 to 400 of those tables were given to junkets. And given that the junket market is no longer there, we didn’t feel it necessary to have all those tables. Between City of Dreams, Studio City and Altira, it would be really hard to jam-pack 900 mass tables onto the floor.
“I think we have a good model right now and with Studio City Phase 2 opening, if anything it’s going to completely relaunch that property. If anything, we’ve always felt that Studio City was underappreciated. So now with the new positioning, with the new indoor water park and over the last few years, even during COVID, we redid a lot of the retail to reposition the property to be even more mass-focused, so we feel very good about the number of tables we have there and the number of rooms we have there.”
Melco also revealed a slight delay to the opening date of its Cyprus integrated resort, City of Dreams Mediterranean, with the company granted an extension from its previous May launch until 30 June 2023.
“We continue to work with our contractors with a target to open within that timeframe,” Ho said.
