Before the City of Dreams opened in June, the analysts and other gambling executives were expressing hope that this would mark the turnaround in Macau’s fortunes. Several came right out and said that they were pinning their hopes for the future on what happened with the City of Dreams launch.
Las Vegas Sands and Galaxy Entertainment both have suspended projects on the Cotai Strip and have been indicating the possible renewal of construction should the City of Dreams re-energize the Macau market. Gaming analysts, however, have made it clear that they think any new casino openings will depend on how the latest resort performs over the next few months.
At the recent G2E Asia summit in Macau, gaming analyst Andrew Zarnett (Deutsche Bank) confirmed that though saying, “If for any reason the City of Dreams does not meet expectations, then things will slow down again and we may not see another new project for tow to three years”.
After two years of financial distress, City of Dream’s owner Melco Crown Entertainment was also looking forward to some relief to be given by the newest Macau development.
Despite a tremendous first month, the City of Dreams opening has “clearly failed to grow the market”, said Bank of America/Merrill Lynch analyst Shaun Kelly. Macau’s gaming revenues were down for June by 17% over last year even with the City of Dreams adding to this year’s revenues.
While Melco Crown announced to investors that the City of Dreams had seen a total rolling chip turnover of $250 million from it’s first month 1.2 million gamblers, according to Kelly the hold percentage of the casino was only .8% when it had been projected to be around 2.85%. Instead of the 8-10 percent market share that had been expected, the City of Dreams grabbed less than 7% of the Macau market during it’s inaugural month.