The 2016 annual report was filed this past Friday by Galaxy Entertainment Group Ltd which revealed that Phases 3 and 4 of the Galaxy Macau will see virtually all of the floor areas used for non-gaming facilities. Lui Che Woo, the Chairman of Galaxy Entertainment Group Ltd, announced the changes in the annual report.
According to Lui Che Woo, Galaxy Entertainment is moving forward with Phases 3 and 4 with construction set to commence either late in the first quarter or early in the second quarter of 2017. In essence, all of the floor areas will be allocated to non-gaming with MICE, family facilities and entertainment being the primary targets. The term MICE refers to the non-gaming activity segment for meetings incentives, conferences and exhibitions.
Casino jurisdictions often require that the full floor area to dedicated to casino gaming. However, according to GGRAsia, investment analysts have found that gaming area in integrated resorts will often have a higher yield percentage-wise than non-gaming areas. Because of this, a small portion of the resort floor can actually provide the majority of the earnings for the property.
In the filing, the chairman also mentioned the Centre and Platform policies of the government of Macau as well as the central government of China, along with the Tourism Industry Plan of Macau. The chairman stated that the central government has reiterated their support for Macau in the development of the One Centre, One Platform which will help to benefit Macau. The incoming Tourism Industry Plan is another example of how the government is trying to help the sector, according to Lui Che Woo.
The report continued with the chairman noting that Galaxy Entertainment is ‘positive on the longer-term outlook for Macau and we are hopeful that the recent signs of stabilization will (see) successful transition into a sustainable recovery.’ The chairman did acknowledge that for the shorter term, the company faces an increase in regional competition and a regulatory environment that is tightened.
Earlier this month, Francis Lui Yiu Tung, the Deputy Chairman of Galaxy Entertainment, stated that the Phase 3 and Phase 4 investment budget will be at minimum $5.54 billion. The venues in these phases will be focused on young adults and families, according to the Deputy Chairman.