MGM China to Invest Almost $200 Million in MGM Macau Upgrades
MGM China Holdings Limited announced on Wednesday its plans to invest more than HKD1.5 billion (US$194 million) to upgrade MGM Macau between now and 2016.
Although the MGM Macau is currently MGM's only property in Macau, this huge investment is just a drop in the bucket compared to the investment of $2.9 billion for a planned second Macau property, the MGM Cotai.
MGM Macau is already one of the most successful casinos in all of Asia even before this planned investment. The property's net revenue in July 2014 was 40 percent higher than in July 2013, which is more than double of the market's total growth of 17 percent. But just because things are going well for MGM Macau, doesn't mean they can't be better.
The new MGM Cotai property isn't due to open until 2016, making it no coincidence on the timing of planned upgrades of MGM Macau, as the Special Administrative Republic of the People's Republic of China is currently the number one gaming mecca throughout all of Asia, and keeping themselves relevant while building their second casino appears to make sense.
MGM China Holdings Ltd Chief Executive Officer Grant Bowie elaborated on the project during a media briefing regarding the timing surrounding the additional investment in MGM Macau. "Before MGM Cotai opens," he said, "we will significantly reposition this property [MGM Macau], because we don’t want to lose any business."
We should see the first changes at MGM Macau this coming November, with many new shops being added to the existing ones. As Bowie explained, "We are starting to identify a series of different spaces that we would be looking to put retail in."
While high rollers do love shopping, perhaps more important to this lucrative casino segment is planned VIP facility upgrades. These changes are important due to the changing nature of the needs of junket operators' customers.
Bowie explains, "The physical nature of the junket business is evolving. Junkets and customers are no longer wanting large numbers of open tables – most people are moving to smaller table groupings."
Perhaps the most challenging aspect of operating a casino and resort in Macau, not only to MGM but to its competitors, is the lack of development of the local nightlife.
In Las Vegas this is all part of the scene and part of what attracts millions of people around the world to travel to what is still considered to be the world's gambling mecca. In Macau, the nightlife scene just hasn't developed, much to the dismay of MGM and others.
MGM hopes by investing in changes in its entertainment offerings, it can reverse some of this trend.
Stay tuned to PokerNews as more news develops in the Asian gambling marketplace.
Photo courtesy of Wikipedia.org
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