Batman, 400-foot Ferris wheel to Macao's rescue
Updated: 2015-10-28 07:35
By Bloomberg in Hong Kong(HK Edition)
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Hollywood actor Leonardo DiCaprio (from left), billionaire James Packer, co-chairman of Melco Crown Entertainment Ltd; film director Martin Scorsese; billionaire Lawrence Ho Yau-lung, chief executive officer and co-chairman of Melco Crown Entertainment Ltd; actor Robert De Niro and filmmaker Brett Ratner at the opening of Melco's Studio City casino resort in Macao on Tuesday. Justin Chin / Bloomberg |
The Batman ride in Macao's Studio City isn't just about rescuing Gotham City. The $3.2-billion casino resort's owner Melco Crown Entertainment Ltd is also hoping it'll draw a new kind of thrill-seeker to the world's biggest gambling hub.
Offering a Batplane flight and a high-speed car chase, the simulation adventure is a key attraction in Melco's hotel and entertainment complex, which opened in Macao on Tuesday. Studio City is the latest test of the city's ability to attract visitors wanting to play on more than gaming tables and slot machines.
The Hollywood-themed venue is among $28 billion of investments the city's gambling houses will make in the next three years. Featuring 250 gaming tables, 1,600 hotel rooms and a figure-eight Ferris wheel, Studio City joins Galaxy Entertainment Group Ltd's new casinos targeting families and tourists, in contrast with the dozens of gambling-focused establishments in Macao. The city's casino revenue has plunged 36 percent this year, as a widening graft crackdown and slowing economy on the mainland deter the country's high rollers.
"Studio City may be a new growth engine for Melco and Macao's casino industry as a whole," said Richard Huang, who tracks casino stocks for Nomura Holdings Inc in Hong Kong. The new project by Hong Kong-based Melco, controlled by billionaires Lawrence Ho and James Packer, "is more devoted to designing the non-gaming facilities".
Studio City will target mass-market gamblers, Ho said on Tuesday, as opposed to high-stakes VIP bettors who currently contribute the bulk of the city's gaming revenue. Macao's future "will be driven by the middle class" and the new casino still has space to expand its non-gaming facilities in future, he said. Melco is looking for a 20-percent return on its investment in Studio City, according to Ho.
Ho had wanted Studio City to be an homage to epic Hollywood films, according to Gary Goddard, the North Hollywood, California-based theme-park designer, who helped create the resort. The son of Stanley Ho Hung-sun, the Macao casino kingpin who had held a monopoly on gambling in the city for four decades, initially envisioned a hole in the middle of the attached hotel to resemble a meteor shot through the building. They settled instead on the Ferris wheel, 130-meter high (427 foot) and shaped like an eight, a lucky number in China.
Riding in metal-clad capsules that holds up to 10 people, Studio City visitors get a bird's eye view over much of Macao's Cotai Strip, and over the sea to the mainland city of Zhuhai.
Melco closed 3.1 percent lower in New York at $17.83 ahead of the new casino opening, the stock's biggest drop in a week. Hong Kong-listed casinos also closed lower, with Wynn Macau Ltd falling 2.2 percent and MGM China Holdings Ltd down by 1.6 percent. The benchmark Hang Seng Index rose 0.1 percent.
The stakes are high for Melco. The casino operator has yet to win authorization from the Macao government for all the 400 gaming tables it needs at Studio City by next October to meet conditions on $1.4 billion of loans, according to Standard & Poor's Ratings. The company is asking banks to waive financial conditions for a year on the loan, people with knowledge of the matter said on Friday.
An adult Studio City ticket that includes the 15-minute Batman ride, getting on the Ferris wheel, as well as entry to a magic show costs 650 patacas, or $81. Disneyland in Los Angeles charges $99 for an all-day ticket for anyone over 10. While not exactly cheap, it's affordable for the mainland's mass-traveler market, Huang said.
(HK Edition 10/28/2015 page9)