Melco Resorts says it is shifting the focus of its Altira property in Macau from VIP to that of premium mass, as part of the company’s strategic shift towards the high-margin market.
As part of this shift, the company on Tuesday said it has shut its VIP operations at Altira and moved its existing junket and premium direct VIP business to City of Dreams and Studio City.
Instead, the VIP gaming space at the Altira will now be reinvented to cater to the premium mass segment, whilst non-gaming assets there will be relocated to support the premium mass focus.
“Although historically focused on the VIP segment, Altira has always enjoyed a level of premium mass playing which we will enhance and reinforce through this strategic realignment,” said Melco Resorts CEO Lawrence Ho in an earnings call on Tuesday.
Ho said the transformation will take approximately 12 months to complete.
“After their transformation, we expect Altira to emerge as a stronger, higher-margin, more stable property in the portfolio,” he added.
David Sisk, chief operating officer of Melco Resorts said the transformation of Altira has been part of refocusing the company towards its “bread and butter”.
“And as you know, at Melco, we’ve always prided ourselves on developing great products and really focusing on our premium customers, particularly our premium mass customers and our mass customers. And that’s where our profitability is.”
“It kind of creating a boutique experience for our guests there. They’re looking for something a little bit different than maybe we have in Cotai, but it’s just a really unique opportunity for us to do that. So we thought that was a good time for us to maybe make this move and to move forward with this kind of this new area for our business there at Altira.”
Analysts have long touted the importance of the premium mass market, particularly as a short-term recovery driver for Macau coming out of the Covid-19 pandemic.
Last year, Bernstein analyst Vitaly Umansky said that Macau operators focused on the premium mass market are likely to significantly outperform in the short term, while the VIP sector may take another two years to recover.
The premium mass customer has been less affected by the economic downturn and it also takes fewer numbers to drive revenue, the firm said.
The analysts pegged Melco Resorts and Wynn Resorts to be in the best position to capitalize on this market, though in the medium to long term, Bernstein still expects mass to be the main driver for the Macau market.