Inside Asian Gaming

SEPTEMBER 2018 INSIDE ASIAN GAMING 23 COVER STORY pipeline to drive continued growth, especially on the mass side, offsetting potential high-end headwinds. Those upside triggers include continued property ramp-ups at Melco’s City of Dreams following the 15 June opening of Morpheus Tower, the re-branding of Countdown, the former Hard Rock Hotel, as Libertine, plus the revamp of Studio City’s entertainment offerings. Wynn Palace and Sands China’s Parisian both continue moving smartly toward the market center after initially targeting opposite ends. Despite opening MGM Cotai in February, MGM China lost market share in Q2; expect better things ahead. Within the next 12 to 18 months, the bridge linking Macau to Hong Kong and its airport, plus the rail link from Hengqin, are likely to begin operations. SJM’s Lisboa Palace, the next Cotai IR, should be open. Sands China will likely have added suites at Four Seasons and St Regis, with Sands Cotai Central’s rebirth as Londoner in progress. Galaxy Macau phases three and four are taking shape faster than expected, so won’t be far behind. When and if there’s free passage across the Lotus Bridge crossing between Hengqin and Macau, that will bring thousands more visitors and guest rooms on Cotai’s doorstep into Macau’s mass market narrative and set the stage for phase two of Studio City. JP Morgan’s Kim and Zhuang write, “When the dust settles from recent GGR misses and China macro concerns, we believe the market will start to appreciate the industry’s strong EBITDA and FCF [free cash flow] trajectory – led by robust mass demand and drop-off in CAPEX – as opposed to just focusing on headline GGR (which will inevitably decelerate).” Slow but steady looks like the next big thing.