MGM China Holdings is potentially planning a major expansion of its resort properties in Macau as it seeks to diversify beyond traditional casino operations and cater to the growing mass-market tourist segment.
Singapore publication Business Times cited sources familiar with the matter to allege that MGM is in discussions with consultants and designers about potentially adding a new wellness-focused building to one of its Cotai resorts.
The proposed expansion would include hundreds of additional hotel rooms as well as facilities such as spas and health treatment services.
“The project is part of the group’s efforts to bolster its non-gaming offerings and attract mass-market tourists, especially those with stronger spending power known as the ‘premium mass’ who typically lose over thousands of US dollars a day,” the sources said.
MGM currently has the smallest hotel portfolio among Macau’s six casino operators, with only around 2,000 rooms. The planned expansion would help the company better compete for the mass market customer base, as the lucrative VIP segment has declined in recent years.
However, proposals have been put forth to expand the current MGM Cotai property, by adding an additional structure on top, something the current foundation can support and could increase its current hotel room offerings on the Cotai Strip.
This strategic shift aligns with MGM’s recent plans to open a new art museum and a traditional Chinese medicine wellness center at another of its Macau resorts, in line with its non-gaming investment mandate under the new gaming license.
MGM China, a majority-owned subsidiary of MGM Resorts International, will reportedly issue $500 million in new senior unsecured notes, with net proceeds from the new notes will be used to pay down a portion of MGM China’s existing revolving credit facility and for general corporate purposes.
MGM China indicated that this international offering of senior unsecured notes will be available to professional investors only.
The company’s market share of Macau’s gaming revenue has also increased significantly, from 10 percent in 2019 to 17 percent in the first quarter of 2024, aided by gaming table expansions, resort upgrades, and the adoption of new technologies to manage tables more efficiently.
Macau’s casino operators have been rolling out various promotions and incentives to lure customers back to gaming floors, including free food and drinks. However, the government has recently advised limiting these freebies to players only.
MGM’s planned resort expansion in Macau underscores the industry’s broader shift towards offering more integrated resort experiences that go beyond just casino gaming.
