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Melco Unveils Plans to Relaunch Studio City in Q1 2024 Amidst Record Casino Performances

In an exciting development for the global gaming industry, Melco Resorts & Entertainment has announced plans to relaunch its flagship property, Studio City, in the first quarter of 2024. This decision comes on the heels of record-breaking performances by its casinos, signaling a major boost for the company and a revitalization of the industry as a whole.

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Background of Studio City

Studio City, a cinematically-themed resort and casino located in the heart of the gaming capital, Macau, first opened its doors in 2015. Known for its Hollywood-inspired architecture and unique entertainment offerings, Studio City quickly became a landmark destination, drawing visitors from around the globe.

Record Casino Performances. The decision to relaunch Studio City aligns with Melco’s recent financial success. The company has reported unprecedented earnings from its casino operations, outstripping industry expectations. This surge in revenue is attributed to strategic business decisions, enhanced customer experience, and a robust recovery in the tourism and gaming sectors post-pandemic.

Revitalization and Expansion Plans

Enhanced Gaming Experience. As part of the relaunch, Melco plans to introduce state-of-the-art gaming technologies and expand its casino floor. This move aims to cater to a diverse range of patrons, from casual visitors to high rollers, and to solidify Studio City’s position as a premier gaming destination.

Luxury Accommodations. The relaunch will see an upgrade in Studio City’s accommodations, with the introduction of new luxury suites and rooms designed to provide an unparalleled guest experience.

Entertainment and Dining. Studio City is set to enhance its entertainment offerings, with plans to introduce new shows, concerts, and events. The resort will also expand its dining options, featuring world-renowned chefs and an array of international cuisines.

Technology and Sustainability. Melco is committed to integrating advanced technology and sustainable practices into its operations. The relaunch of Studio City will see the implementation of innovative solutions to enhance operational efficiency and reduce the environmental impact.

Economic Impact

The relaunch of Studio City is expected to have a significant positive impact on the local economy, including job creation and increased tourism revenue. Melco’s investment in Studio City is seen as a vote of confidence in the region’s gaming and hospitality industry.

Market Reaction. The announcement has been met with enthusiasm from investors and industry analysts. Melco’s stock has seen a positive uptick, reflecting investor confidence in the company’s growth trajectory and the potential success of the Studio City relaunch.

Industry Implications. Melco’s move to revitalize Studio City is indicative of a broader trend in the gaming industry towards reinvestment and innovation. It highlights the industry’s resilience and adaptability in the face of challenges, setting a precedent for other players in the market.

Looking Ahead

With the relaunch of Studio City, Melco is poised to redefine the gaming and entertainment landscape in Macau. The company’s focus on delivering exceptional experiences, combined with its financial prowess, positions it to continue its trajectory of growth and success in the years to come.

Lawrence Ho Yau Lung, the chairman and CEO of Melco Resorts & Entertainment Ltd, has made a pivotal announcement regarding the Macau-based Studio City complex. Set for launch in the first quarter of 2024, or possibly early in the second quarter, this development is part of the anticipated Phase 2 reopening, following the successful launch of Melco’s W Macau hotel in September. This announcement is particularly significant in light of the record-high revenues reported by both the Studio City complex and the City of Dreams in October 2023.

Studio City’s Phase 2 Rollout

Ho expressed excitement about the upcoming Phase 2 of Studio City, acknowledging the strategic, gradual introduction of new offerings to the market. According to GGRAsia, extensive renovations are underway, particularly for retail facilities, which are expected to open in the next few months. David Sisk, Melco’s Chief Operating Officer of Macau resorts, highlighted the unique appeal of the W Macau, especially to a female demographic, which is anticipated to further expand Melco’s customer base.

Record-Breaking Revenue in October

During a recent press conference, Melco representatives disclosed that Studio City’s casino gaming floor had achieved an unprecedented revenue peak in its history. Similarly, the City of Dreams matched this record-breaking performance, indicating a robust upward trend for Melco’s properties.

Anticipation for The House of Dancing Water

In line with these developments, Melco plans to relaunch its popular show, The House of Dancing Water, likely in late 2024. This initiative is expected to draw even more visitors to the properties, capitalizing on the current positive trend.

Operational Costs and Investments

Geoffrey Davis, the CFO of Melco, stated that the relaunch would incur an additional daily cost of around US$100,000. He elaborated that the operating costs in Macau increased to about US$2.5 million per day in the third quarter, a rise attributed to new full-time employees, the opening of the W Macau, and increased marketing expenditures.

Despite these rising costs, Davis noted an increase in the company’s EBITDA during the third quarter. He anticipates the daily operating costs to reach around US$2.6 million in Q4 2023, maintaining a cost-saving trend of 20 to 25 percent achieved during the pandemic.

Strategy for Debt Repayment and Growth

In a strategic move, Melco has been actively reducing its debt, repaying US$100 million in the third quarter of 2023 and an additional US$100 million at the end of October. Davis mentioned that Melco still has access to significant undrawn credit facilities and plans to continue monitoring cash flow for further debt reduction.

Expanding Accommodation and Growth Prospects. As the market shows signs of surpassing 2019 levels, Melco is set to add approximately 900 rooms at Studio City. This expansion, combined with the new Epic Tower and the W Macau hotel, aims to accommodate more guests and accelerate growth.

Melco Resorts & Entertainment Limited is gearing up for a significant milestone with the planned launch of Phase 2 of its Studio City complex in Macau. Slated for the first or early second quarter of 2024, this launch follows the successful opening of the W Macau Hotel in September and is part of a broader strategy to enhance the company’s presence in the region.

Strategic Expansion in Macau

Lawrence Ho Yau Lung, Chairman and CEO of Melco Resorts & Entertainment, has announced plans to relaunch Studio City, marking a pivotal moment for the company. This decision is fueled by the recent financial triumphs of both Studio City and the City of Dreams, Melco’s flagship facility in Macau, which both saw significant revenue boosts in October 2023.

A Methodical Approach to Market Introduction

Ho Yau Lung has emphasized a strategic, phased approach to the Studio City project, ensuring a comprehensive and well-planned introduction of new offerings. He mentioned that significant renovation work is still underway, with the majority of the retail facilities anticipated to open in the next few months.

Targeting a Broader Demographic. David Sisk, the COO of Macau resorts at Melco, pointed out the unique appeal of the W Macau Hotel, particularly among female guests. This demographic focus is a key component of Melco’s strategy to expand and diversify its customer base in the region.

Record-Breaking Performance. Melco representatives have proudly noted the exceptional performance of the Studio City casino gaming floor, which achieved an all-time high revenue record. Similarly, the City of Dreams in Macau matched this achievement, indicating a strong and positive momentum for Melco’s operations in the area.

Anticipating The House of Dancing Water Relaunch

Looking ahead, Melco is preparing for the late fourth quarter 2024 relaunch of its renowned show, The House of Dancing Water. This event is expected to draw additional visitors and further cement the company’s status as a leading entertainment provider.

Financial Prudence and Growth. In line with its growth initiatives, Melco has made significant strides in reducing its debt, repaying US$100 million in the third quarter and an additional US$100 million in late October. With approximately US$1.2 billion drawn from its revolving credit facility, the company still has a substantial reserve of about US$750 million, positioning it well for future endeavors.

Conclusion

Melco Resorts & Entertainment’s strategic decision to launch Phase 2 of Studio City in Macau represents a major step in the company’s expansion and consolidation in the gaming and entertainment industry. With a focused approach on market diversification, customer experience enhancement, and financial prudence, Melco is poised to strengthen its position as a leader in the dynamic Macau gaming market. The anticipated relaunch of The House of Dancing Water and the ongoing enhancements at Studio City and the City of Dreams highlight the company’s commitment to delivering unparalleled entertainment experiences.

Melco Resorts & Entertainment Ltd’s strategic advancements, including the anticipated launch of Studio City Phase 2 and the relaunch of The House of Dancing Water, position the company for substantial growth in the coming years. With record-breaking revenues and a focused approach to operational efficiency and market expansion, Melco is poised to solidify its status as a leading player in the global gaming and entertainment industry.

The planned relaunch of Studio City by Melco Resorts & Entertainment in the first quarter of 2024 marks a significant milestone in the gaming industry. It reflects the company’s commitment to innovation, excellence, and sustainable growth. As Studio City prepares to welcome guests with its enhanced offerings, it stands as a testament to Melco’s vision and leadership in shaping the future of the global gaming and entertainment sector.

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