Melco touts ‘solid results’ for Q1, looks to continued growth
Speaking to analysts Thursday, Melco Resorts & Entertainment CEO Lawrence Ho pointed to “a solid set of results for the first quarter that demonstrates our strengths and our growth prospects”.
The Hong Kong-listed operator runs integrated resorts in Macau, Manila and Cyprus, and is preparing to open its Sri Lanka casino later this year.
‘Firing on all cylinders in Macau’
Melco’s market share in Macau grew from 14.7% in Q4 2024 to 15.7% in Q1 2025, “and remained stable at this level in April”, Ho said. Property EBITDA grew 32% quarter-over-quarter
Mass drop increased throughout the quarter and reached record highs at both City of Dreams and Studio City. That momentum continued into April and Golden Week, the national holiday celebrated 1-5 May in China.
Despite new supply in Macau — specifically the Londoner Grand, which opened in April and targets the premium mass segment — traffic at Melco resorts grew by 30% year on year.
“I don’t think there’s been any cannibalization … or material impact” from the Londoner, said Ho. “I think we’ve found our groove again and rediscovered our identity.”
The return of House of Dancing Water, a signature spectacle at City of Dreams Macau, “was a resounding success” and is expected to increase footfall by about 4,000 visitors per day, he added. “Other initiatives to drive traffic [include] a revamp of our retail area and renovation of the main entrance to City of Dreams and Studio City.”
Following some disruption during now-complete renovations at the latter resort, “the sequential growth in its property EBITDA demonstrates the impact of these initiatives”, Ho continued. Melco is “firing on all cylinders in Macau”.
Manila for sale, Mediterranean improves
City of Dreams Manila felt the impact of increased competition in that market, Ho continued. “We’re adjusting our cost structure and reviewing our marketing programs to enhance EBITDA contribution from the business.”
Melco continues its quest to offload the IR in the Philippines Entertainment City casino zone. The move would free up capital for a Thailand bid, if and when that nation legalises entertainment resorts with gaming.
“Potential buyers are signing NDAs,” Ho told analysts. “Over time we will whittle down that group to a short list for the bidding process. We’ll come back when there’s something to announce.”
Meanwhile, City of Dreams Mediterranean in Cyprus “achieved 10% year-over-year growth in property EBITDA” for Q1.
“Despite continued noise in the region,” said Ho — meaning impacts on tourism from the Ukraine and Israel-Hamas conflicts — the Melco property “is starting to ramp up” for the coming summer. Bookings are “materially higher than what we had this time last year. We’re optimistic about the results that Cyprus can deliver over the rest of the year.”
Last but not least, preparations continue for the opening of a Melco casino at City of Dreams Sri Lanka. Doors are expected to open in the third quarter.
Looking ahead: more ‘rational’ reinvestment
Ho said Macau concessionaires are being “more rational” about market reinvestment in 2025.
“Post-Covid, we started slow. Then last year, we’d gone overboard with regards to reinvestment. … We offer a premium product, so we should never be the most competitive and most aggressive in terms of marketing schemes. At the end of the day, we have probably the two best hotels in Macau at City of Dreams and Epic at Studio City, which is also an amazing new product.”
Those products along with a family-friendly indoor water park at Studio City are “enough to attract a very broad customer base,” said Ho. “All the non-gaming attractions that we have built years in advance will be great for us going forward.” Now is the time to “be disciplined and … continue to focus on improving our margin”.
The Chinese government is lending a hand through recent stimulus measures.
“Chinese policy is the most important thing to us, even more than the Chinese economy,” Ho concluded. Beijing has been “super-supportive and is now focusing on increasing domestic consumption, discretionary spending and domestic travel. These are all key criteria for us.”