SJM Holdings has announced it could partially open Grand Lisboa Palace in Macau before the end of its Q2 of 2021.
Grand Lisboa Palace in Macau to Open before the End of SJM’s Q2
SJM Holdings will open its long-anticipated Cotai integrated resort, Grand Lisboa Palace, in Macau, the gambling capital of the world. The resort will initially include 300 hotel rooms, 304 gaming tables, 1,034 slot machines, many F&B and retail outlets.
During its Q1 2021 earnings call with analysts, the company gave more details on how the gaming areas of the resort will look when the final operations come through. Analysts state that SJM management has confirmed that Grand Lisboa will open partially before the end of Q2.
Originally Grand Lisboa Palace was supposed to open in 2017, but it suffered several delays over the past years. The company’s management has not disclosed the exact date of its partial opening. Currently, the company has around 2,000 employees waiting for the launch of Grand Lisboa Palace. Once fully ramped, the expectation for the number of employees is to rise to 6,000.
At the beginning of the year, SJM announced that some of its employees are eligible to receive a living subsidy bonus. The company launched the scheme in 2014, calling it a “guaranteed allowance” for its employees.
The Resort to Have 1,892 Rooms When It’s Fully Operational
SJM has confirmed that although during the initial opening it will have a little more than 300 rooms, later on, it expects to accommodate its visitors in up to 1,892 rooms when its boutique hotels, Palazzo Versace Macau and Karl Lagerfeld Hotel, open doors.
According to Credit Suisse analysts Rebecca Law, Kenneth Fong, and Lok Kan Chan, the success of Grand Lisboa Palace are mostly dependent on the execution of the competitive marketing segment. They noted that they are optimistic about the prospects and are eager to start operations. They said that the marketing and premium mass operations are ready to go.
Skeptics Don’t Believe GLP Will Get Better Than Its Fair Share
While it waits for Grand Lisboa Palace to finally open doors, SJM continues to fall behind its competitors. However, the company told analysts that once the first guests arrive, it will reclaim “better than its fair share.”
Sanford Bernstein’s analysts, Vitaly Umansky, Kelsey Zhu, and Louis Li, expressed skepticism on achieving this goal with Grand Lisboa Palace. According to them, when it comes to loyalty programs, product offering, and service levels, there is high competition in Cotai. They stated that they don’t expect Grand Lisboa to get “better than its fair share” for a few years.
According to Management, junkets are waiting for GLP’s offering, and that could increase its share on the market. However, the margin will be very questionable.
Analysts also stated that it’s a wait-and-see game now, as the junkets could potentially impact profit.