SJM Holdings to run Grand Lisboa Palace at full capacity by year-end
The company plans to operate all 1,892 rooms.
Macau.- SJM Holdings is expected to reach full capacity at Grand Lisboa Palace (GLP) resort by the end of the year. According to a note from BofA Securities, the company plans to operate all 1,892 rooms.
The Grand Lisboa Palace has already opened two of its hotels. It partially opened on July 30 2021. The Palazzo Versace Macau had a soft opening in late April, but BofA Securities analysts Ronald Leung, Candice Zhang, and Yoyo Pang said the occupancy rate remains capped at 70 per cent due to labour shortages.
They added that SJM Holdings remains focused on its goal of achieving EBITDA breakeven for the Grand Lisboa Palace in the third quarter, provided it secures a market share of 2.5 per cent.
Meanwhile, JP Morgan analysts DS Kim and Mufan Shi highlighted the challenge faced by SJM Holdings at the venue. They say the property’s location and lack of destination appeal have hindered its ability to attract a critical mass.
With the decline of junkets, the company must establish its own high-end business, specifically targeting premium mass and direct VIP segments, which may prove challenging due to SJM’s limited experience and database in this area.
However, the company is expected to benefit from cost-saving efforts during the Covid-19 pandemic. Analysts predict that by 2024, SJM’s all-in operating expenses will be only 5 per cent to 10 per cent higher than pre-pandemic levels despite the additional capacity at Grand Lisboa Palace.