Sands China Foresees Recovery in Macau Casino Industry as The Company Prepares Its Newest Parisian Resort
Sands China Ltd. oversees the decline in gross gaming revenue in Macau as the casino prepares the opening of the new Parisian Macao resort in September. The company have confidence the drop in revenue could end this month.
According to Bloomberg, Macau's gross gaming revenue has seen declines for 20 months. Since June 2014, high-stakes VIP gamblers have been avoiding the city due to the country's slowing economy and campaigns against corruption. Likewise, Sands China as one of Macau's biggest operators has seen prolonged revenue fall for six quarters.
However, during the Lunar New Year period this month, Macau saw a satisfying performance, as more tourists from mainland China visited the world's biggest gambling hub. Sands China also expects the casino industry to start recovering. The company's results this year are expected to be relatively flat compared with last year. Analysts expect the company's net income to decline 8.5 percent as revenue drop 2.5 percent.
Besides anticipating the casino industry's recovery, Sands China is also preparing for its newest casino, The Parisian Macao. CalvinAyre reported that the $2.7 billion project was required to be completed on April 2016. However, Sands China asked the authorities to extend the time. The Land, Public Works and Transport Bureau have agreed to extend the deadline to November 2016.
Despite the declining revenues, Sands China CEO Sheldon Adelson expressed confidence that the new casino resort would be as successful as its previous project Venetian Macao. "I am confident that the Parisian Macao will both replicate the success of the Venetian Macao as another themed, iconic and must-see integrated resort destination for Macau's visitors while expanding the overall business and leisure tourism appeal of Macau," Adelson explained during the company's 2015 results announcement.
In addition to the gaming space, the Parisian Macao will have about 3,000 rooms and suites, a retail mall, and a themed water park. The new resort will also feature a replica of the Eiffel Tower with half of the original size.
Adelson stated the importance of the newest project in boosting not only the company's revenue but also the region's economy, as reported by GGRAsia. "With the opening of the Parisian Macao in 2016, Sands China will have invested in excess of $13.0 billion to deliver on our promise to contribute to Macau's diversification and success as Asia's leading business and leisure tourism destination."
Sands China is optimistic about Macau's future prospect in the casino industry. Macau, the world's biggest gambling hub, has been suffering revenue declines for almost two years, but the company foresee a recovery as they finish the newest project, The Parisian Macao.