SJM to launch more rooms and tables at Grand Lisboa Palace in Q2
The government has approved 150 more gaming tables at Grand Lisboa Palace.
Macau.- SJM Holdings plans to open the remaining hotel rooms and more gaming tables at its Grand Lisboa Palace resort in the next quarter, according to Hong Kong-based brokerages. The Cotai casino resort will have almost 1,900 rooms, of which around 570 have already opened.
BofA Securities’ analysts Ronald Leung and Candice Zhang said the company will open an additional 188 rooms in the west tower of the resort this month and another tower with 658 rooms and Palazzo Versace Macau in the second quarter. SJM Holdings also expects to add up to 150 gaming tables,which would mean doubling the current number.
Hotel occupancy rates at Cotai’s Grand Lisboa Palace and Macau’s Grand Lisboa have averaged over 100 per cent during weekends, and over 80 per cent overall the past two months. According to a report by the CICC, SJM Holdings Ltd’s Grand Lisboa Palace resort currently has operating expenses of around HK$5m (US$636,988) per day.
The company expects this figure to rise to HK$8m to HK$9m when the resort is fully open, which is a decrease from the previously projected HK$10m. Several brokerages have reported that SJM Holdings expects to incur HK$1.4bn in capital expenses for 2023, with HK$900m going towards Grand Lisboa Palace.
See also: SJM posts net gaming revenue of US$780m for 2022
While SJM Holdings’ overall earnings before interest, taxation, depreciation, and amortisation (EBITDA) turned positive as of Wednesday, the EBITDA for Grand Lisboa Palace remained negative. However, the casino operator’s management believes that Grand Lisboa Palace’s EBITDA could break even in the second half of this year after the rest of the property is open.
Furthermore, brokerages suggest that the casino resort could achieve a 2 to 3 per cent market share of gaming revenue, compared to the current figure of approximately 1 per cent.