Melco Announces Recovery Is Better than Expected with First Quarter Results
LISTEN TO THIS ARTICLE:Melco Resorts and Entertainment, the entertainment and gaming operator, has announced that as restrictions are lifted, it has enjoyed better-than-expected revenues for Q1 and the first part of the year when compared to 2019.
Melco owns and operates resorts in Asia and Europe, including Studio City in Macau, and the Total Revenues for the group for the first quarter of 2023 were $716.5 million. Showing a rise of 51% from US$474.9 million for Q1 in 2022. This rise is attributed to the relaxation of Covid restrictions in place last year.
The Gaming machine revenues for Studio City and Cyprus were also impressive for Q1 in 2023, with Studio City enjoying an increase to $431.7 million from $233.0 million in 2022. While the Gaming machine handle for the Cyprus operations was $384.9 million for the first quarter of 2023, up from $247.1 million for the same period in 2022.
Last year the entertainment company introduced cost-saving measures to support its recovery, leading to 2,000 fewer employees and achieving 25% savings. Melco achieved these savings during the covid pandemic and wants to keep these efficiencies in place as restrictions are lifted, and things return to normal.
In response to a question about the type of customer currently at Melco Resorts, the leadership team pointed out the recovery was being led by premium customers as the visitor numbers are down. This means the spending per customer is far higher than for the same period in 2019.
The statement highlighted that there were some external factors that affected the number of customers to its resorts. Primarily the price of travel is quite high at the moment, and footfall at Macau airport is around 30% of the normal figures expected.
When asked to break down the Q1 results by each month, senior leadership for Melco said each month had shown increased revenue, and they expected this to continue throughout the next quarter. They explained this was because the hotel occupancy for the group was only around 70% to 80% and was constrained by the loss of staff during the pandemic.
Melco is busy recruiting more staff and acknowledged the assistance they have received from the government. Melco envisages that the occupancy of its resorts will be up to 90% in May and should reach 100% in June this year.
We have seen a very encouraging start to the recovery in Macau during the first quarter of 2023, following the relaxation of border restrictions in early January. We continued to see improving momentum into April and Golden Week in May, with mass market table games drop and mass gross gaming revenue during the Golden Week period exceeding the same period in 2019.
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