The Londoner Hotel in Macau May Start Welcoming Guests in February 2021

Article by : Helen Dec 14, 2020

The development of the Londoner Hotel in Macau, one of the two major Sands China’s investments into the Macanese market, now has a tentatively set finish line. Should everything go smooth, the hotel will open its doors to guests in February next year, according to reports in Chinese-language news outlets relaying the words of Sands China’s president Wilfred Wong Ying Wai.

There was no specific opening date given (or grand announcements made), probably because there is still uncertainty regarding the state of the Macanese casino industry. The construction itself, though, is reportedly almost over, with the exterior works and the entrance area being the only unfinished tasks.

The venue’s construction was initially supposed to be done by July this year. Yet, the COVID-19 pandemic got in the way, and the construction works had to be paused for the time being.

Repurposing the former Holiday Inn Macau Cotai Central building into the Londoner Hotel, together with the works on the Four Seasons, is a $2.2 billion effort of Sands China to expand and find its place in the Macanese market. It is somewhat overshadowed by the company’s poor performance in the first half of 2020, according to the company’s interim report. Its adjusted property EBITDA loss amounted to US$243 million, a severe 115% drop compared to 2019. Sands China’s total net revenues also don’t look good – the company brought in US$848 million, which is 81% less than in the first half of 2019.

Finally, the company didn’t turn a profit in the first six months of 2020 – instead, it finished the period with a loss of US$716 million. It is even more disastrous compared to a profit of US$1.07 billion the company brought in over the same six months in 2019. So, it remains to be seen whether opening the new hotel will boost Sands China’s financial performance – or be the final nail in its coffin. Opening the luxurious hotel, which is aimed at drawing the attention of VIP players and high rollers, in February will likely prove to be a wise decision. In 2021, February 12 is the date the Chinese New Year’s Eve falls on, and festivities that follow this date continue for 15 more days, culminating in the Lantern Festival.

Betting on the Chinese nationals traveling to Macau to celebrate the New Year is the best one of the very limited options the hotel and casino operators have at the moment. All foreign tourists are still barred from entering Macau due to the fear of COVID-19 getting “imported” to the former Portuguese Empire’s colony, and there are no signs Macau will roll back or at least ease down the ban. It’s no wonder hotels and casino resorts are going through tough times, financially speaking. According to the Macau Statistics and Census Service data, average hotel occupancy rates were as low as 24.3% in October 2020 – a slight improvement from the 22.5% average occupancy rate in September. Still, it looks like a disaster compared to last year’s October’s 91.2-percent hotel occupancy.

The gross gambling revenue is also depressing, frankly speaking – 3Q20 brought Macanese businesses 92.8% less revenue from casino operations than last year. However, it was still 53.1% more than what the casino industry received in revenue in this year’s second quarter. Mainland China lifted the harsh traveling restrictions for Macau only recently, but it already prompted a whopping 1,409% increase in the number of visitor arrivals in the third quarter of 2020, according to the Macau Government Information Bureau’s report. This could be one of the reasons behind slightly better third-quarter results in gross gaming revenue and occupancy rates; however, the industry has a long path of recovery ahead of itself.

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