HONG KONG -- Despite an already crowded industry, Galaxy Entertainment Group is confident that the opening of its Cotai Strip property in mid-May will bring significant money into its coffers with the company's finance officials saying the new casino resort's growth range could be in the 20% range.
Galaxy Macau, which opens on May 15, is the group's almost US$2 billion undertaking in the Cotai strip and its third property in the Asian gaming haven. It boasts of 550,000 square meter of space and has five gaming areas, more than 2,000 hotel rooms, with over 50 restaurant options. It will have 450 gaming tables and depending on demand, Galaxy said it will increase it to 600 with prior approval from Macau's gaming authorities.
A third of the rooms will be managed by Singapore's Banyan Tree Holdings and Japan's Okura Hotels and Resorts while the remaining 1,500 rooms will be managed by Galaxy itself.
Galaxy Macau will be "Asian-centric" and will feature a sky-top wave pool and a multi-purpose cinema that will be able to feature nine films simultaneously.
Both Galaxy Vice-Chairman Francis Lui and Chief Financial Officer Robert Drake expected the new Galaxy casino resort to generate returns to be in the 20% range and that the property will be significantly cashflow-positive.
According to Drake:
"We are quite confident that even though the projected growth rate is in the 20% range, that translates into absolute dollars of US$ billion of growth. That is a lot to spread among one market."
Lui on the other hand shares the same sentiment but also cautions on the industry's predicted slow growth overall:
"I believe it will likely rise by 20% this year. That is because the base is already so big and to grow from that is challenging, but I believe 20% is achievable."
Experts however think that the opening of the new resort won't significantly affect the current market shares of the six licensed operators in Macau. However, shares of of Hong Kong-listed Galaxy have tripled in value in over a year, doing better than its rivals Sands China Ltd., Wynn Macau Ltd., and even the Stanley Ho-controlled SJM Holdings Ltd.
Posted: March 22, 2011
