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Galaxy to open Cotai resort on May 15
Local casino operator Galaxy Entertainment Group said yesterday that it will open its HKD 14.9 billion (USD 1.9 billion) Cotai resort on May 15, with the timing roughly in line with analyst expectations. The new casino-resort will have 450 gambling tables when it opens, with room for 150 more, the company’s deputy chairman, Francis Lui, told reporters yesterday during a press conference.
The Hong Kong-listed casino operator, controlled by the family of tycoon Lui Che Woo, said it expects Galaxy Macau to be the only new resort to open in the Chinese gambling territory until "at least the end of 2011".
Galaxy's 550,000 square metre property, described as "Asian-centric", will feature 2,200 hotel rooms and over 50 food and beverage outlets, as well as a nine-screen multi-purpose cinema and a sky wave pool plus a man-made beach covering a total of 4,000 square metres.
Singapore-based Banyan Tree and Japan's Okura Hotels and Resorts will make up about a third of Galaxy Macau's hotel rooms, with the gaming company holding the remaining 1,500 rooms. The three hotels will be available to guests on the opening day.
“The Macau SAR Government’s stated goal is to build for its economic future by diversifying its leisure and tourism industry," said Galaxy’s chairman Lui Che Woo.
"We believe Galaxy Macau will lead this development by offering what has been missing so far from the local integrated property market,” he highlighted.
Francis, Lui’s son, confirmed that Galaxy Macau will need 8,000 workers after the grand opening, adding that the company has already hired 7,600.
“We have hired 5,100 local workers and [we’ll have] over 2,000 imported employees,” Francis Lui said, without commenting if the company had mainly hired from local rivals.
“It’s not only about the salary, but also about the whole package that the company offers to its employees,” he said.
The new resort will have capacity for 600 gambling tables, but it will open with only 450, with one-third catering for the VIP market. While StarWorld, Galaxy’s current flagship casino, caters for the wealthy Chinese gamblers, the much-bigger Galaxy Macau will appeal mainly to the mass market of middle-class Chinese.
Yesterday, Galaxy’s deputy chairman said the company will apply to the government to host more gaming tables beyond its initial 450 "if and when necessary”.
Last year, the Government announced that the ceiling for the number of gaming tables was set at 5,500 until 2013. According to the latest statistics, local casinos had 4,791 tables in December.
“We’ll add new tables in the Galaxy Macau, but a part [of the 450 tables] will come from other operations,” Francis Lui explained.
The executive didn't comment on any specific plans to develop the rest of the company's plot. The new resort will only occupy one third of it, and he said the company wants to “develop every square foot of it". “We still have to decide the plan for the second phase, but for now we’re focused on phase one.”
Adequate solution on tobacco ban
The executive also said that the company will not go-ahead with a soft opening this month. “We’ll only open to our staff in order to provide the adequate training. The resort will open doors to the public on May 15.”
Confronted with reports about illegal workers apprehended on Galaxy Macau’s construction site last Wednesday, Francis Lui said the company is doing its best to prevent the problem.
“We support the Government’s crackdown on illegal workers, but they have been hired by contractors and sub-contractors,” he said.
“We asked them not to hire illegal workers. However, if they insist on this, we’ll warn them or proceed with legal actions according to the contracts that we signed with them."
Francis Lui also said that Galaxy Entertainment supports the Government-proposed tobacco control law, but called for an adequate solution.
The proposal gives casinos one year to set up smoking areas of up to 50 percent of the total public area. Gaming operators had said this timeframe is too short to allow for the necessary changes.
“There are both advantages and disadvantages, but I hope the Government can provide a win-win solution,” he stressed yesterday.
Regarding local competition, Francis Lui believes that “a project rooted in Asian ideals and delivered by Asian people could achieve the highest international standards.”
It's an idea shared by his father. “From the beginning, our vision has been to develop and operate a resort that delivers both international-calibre standards but also captures the heartfelt service culture and unique flavour of Asia.
“This is especially critical for success in a market where Asian travellers are so dominant,” said Lui Che Woo.
Analysts are bullish on the property, but believe it won’t change the market share much.
"I think for the first three or four months, first-timers will want to get in there and try it out. I think that is where the major impact is going to be," said RBS analyst Philip Tulk in Hong Kong, quoted by Reuters. "I feel that all operators to some degree will feel the impact for the first few months."
According to Billy Ng, Hong Kong-based gaming analyst at Bank of America’s Merrill Lynch unit, the company shouldn’t have problems in filling the resort.
“It will be enough for everyone, including the new casino,” he told Bloomberg.
The property will also benefit from being the only casino opening its doors in Macau in 2011, said Jonathan Galaviz, an independent consultant.
“Given Macau’s blazing performance, the timing could not have been more perfect for Galaxy,” Galaviz told Bloomberg.
Sands China said it was on track to unveil its new property at the end of this year. In a recent interview with Macau Daily Times, Michael Leven, the company’s acting chief executive officer, said it expects to open half of the Shangri-La and Traders, on plots 5 and 6 in Cotai, “by the end of the year”.
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