Macau’s prominent casino operator, SJM Holdings Ltd, is undertaking an ambitious project to transform former junket areas in its flagship Grand Lisboa casino hotel into luxurious accommodations. This strategic move aims to enhance the overall experience for guests and bolster the hotel’s appeal. Daisy Ho Chiu Fung, the chairman of SJM Holdings, stated in a press release that through this conversion, the group plans to increase its room capacity by over 10 percent.
The former junket spaces will be turned into exclusive villas, mansions, and suites, providing a new level of opulence for visitors. This development follows a similar trend in the region, highlighted in a September note by Goldman Sachs. The note mentioned that MGM China Holdings Ltd, another operator in Macau, was also converting its former junket gaming spaces at MGM Macau into 28 guest villas, reflecting a broader shift in the industry.
Renovation and Expansion Plans Amid Industry Shifts
Daisy Ho, in discussions around SJM Holdings’ strategic moves, mentioned earlier in May that the refurbishment at Grand Lisboa will commence at the end of the year and is expected to conclude in two years. This renovation is a part of the company's broader efforts to rejuvenate its offerings and align with the evolving hospitality landscape in Macau. Currently, Grand Lisboa’s hotel is recorded with a total of 431 rooms, as per the Macao Government Tourism Office. With the upcoming transformations, this number will see a notable increase, further solidifying Grand Lisboa's position as a key player in luxury hospitality.
At Grand Lisboa Palace, SJM Holdings is also making significant additions. Over 50,000 square feet of MICE (Meetings, Incentives, Conferences, and Exhibitions) space will be introduced. This new space will showcase a blend of indoor and outdoor versatility, enhancing the venue’s ability to host large-scale sports and music events. The Grand Lisboa Palace, which opened in July 2021 during the challenging COVID-19 era, has been gradually establishing its gaming and non-gaming offerings.
Analyst Perspectives on the Market and Performance
The transition and development projects are part of SJM Holdings’ strategy to improve market share and business performance. According to Vitaly Umansky, an analyst at Seaport Research Partners, SJM Holdings showed a market share of 13.9 percent in the third quarter, up from 12.6 percent in the second quarter. Excluding satellite casinos, the operated casinos claimed an 8.8 percent market share, compared to 7.8 percent in the previous quarter.
Umansky noted that the increase is partly due to better-than-expected performance in VIP segments, driven primarily by high hold margins at Grand Lisboa and Grand Lisboa Palace. He added that while the results were stronger than the preceding quarter, the impressive EBITDA was largely attributed to the high hold, without which it would have been below expectations. Despite these positive trends, Umansky cautioned that the ramp-up at Grand Lisboa Palace is likely to continue slowly, with potential long-term return on investment remaining suboptimal. As SJM Holdings navigates these developments, the company anticipates that upgrading its facilities will pave the way for improved performance and guest satisfaction in the long run.
Source: Grand Lisboa to tap ex-junket space as villas: Daisy Ho, GGRAsia, November 13, 2024.
Posted by Wizard
Nov 13 2024
Nov 13 2024
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