Macau concessionaire SJM Holdings has adjusted its Services Master Agreement with parent company Sociedade de Turismo e Diversões de Macau (STDM) for the use of STDM-owned hotel rooms. This marks the second revision in 2023, driven by the robust growth in visitor arrivals and increased hotel occupancy during the first three quarters of the year.
Revised Agreement Details:
Under the revised agreement, SJM will now pay STDM a maximum of HK$65.0 million for Hotel Accommodation Continuing Connected Transactions in 2023, up from the previous cap of HK$47.3 million. This adjustment reflects the growing demand for hotel rooms at STDM-owned properties, including Hotel Lisboa Macau, Hotel Sintra Macau, Grand Coloane Resort, and Artyzen Grand Lapa Macau.
Performance Overview:
Despite the aggregate amount paid by SJM for the first nine months reaching HK$29.5 million (62.4% of the existing cap), the actual amount for hotel accommodation has been steadily increasing. Quarterly figures indicate a rise from HK$4.6 million in Q1 to HK$8.2 million in Q2 and HK$16.7 million in Q3.
Factors Driving Revision:
SJM cited several factors for the upward revision, including:
Actual transaction amounts for hotel accommodation services.
Expected growth in gross gaming revenue and visitor arrivals in Macau for Q4 2023.
Anticipated additional demand for hotel rooms due to SJM’s strategy to extend patrons’ stays and broaden the client base.
Provision of a buffer for inflation and unanticipated demand.
Scope of the Agreement:
The revised agreement specifically pertains to hotel room charges for SJM’s selected gaming patrons and guests at STDM Group’s hotels. It does not cover SJM’s self-run casinos or the nine satellite casinos operated by third parties under SJM’s license.
Future Caps:
The existing Annual Caps for the years ending 31 December 2024 and 2025 will remain unchanged, providing stability in the arrangement.
The adjustment in the Services Master Agreement underscores SJM’s adaptability to evolving market dynamics and its commitment to meeting the growing demand for accommodation services. The strategic alignment with anticipated trends in Macau’s tourism and gaming sectors positions SJM Holdings for continued success amid the region’s dynamic economic landscape.