Macau’s major integrated resorts experienced a sharp decline in gaming revenues in the first quarter of 2015.
Casinos contribute approximately 85% of total revenues at Macau’s integrated resorts, but Venetian Macao saw its gaming turnover fall 37.1% to US$676.9 million in the first three months of this year, while Sands Cotai Central’s casino revenue fell 34.3% to US$493.0m.
This was the major contributor to an overall drop in operating profits at both resorts, with Venetian falling 48.8% to US$220m and Sands Cotai Central plunging 60.8% to US$76.4m.
The resorts’ owner, Sands China, experienced a 54.2% decline in net profits in Q1 2015.
But Sheldon Adelson, Las Vegas Sands’ chairman & CEO, remained upbeat about his company’s Macanese operations.
“The Macau market saw strong visitation from mainland China during the quarter and we enjoyed solid visitation to our Cotai Strip properties,” Adelson said. “We welcomed over 16m visits to our Macau property portfolio, delivered strong growth in the high-margin retail mall business and steady performance in most of the other non-gaming segments of our business.
“Notwithstanding a challenging environment in the VIP and premium mass gaming segments, we delivered US$527.7m in adjusted property EBITDA across our Macau property portfolio,” he added.
The decline gaming revenues at Sands’ resorts represents a broader trend across the city. Last week Galaxy Entertainment Group, which operates another major Cotai Strip resort, Galaxy Macau, posted a 32% drop in Q1 revenues and a 40% fall in pre-tax profits.
Macau’s casino decline is largely due to a drop in VIP gaming, linked to the Chinese government’s efforts to crackdown on corruption and excess, and, to a lesser extent, greater regional competition.
But companies are moving ahead with expansion plans in Macau; Sands is planning to open The Parisian Macao and the St Regis at Sands Cotai Central, while Galaxy Macau will open its second phase next month, with new JW Marriott and Ritz-Carlton hotels. Wynn is also planning to develop a major new integrated resort complex on the Cotai Strip.