SJM Holdings’ Grand Lisboa Palace (GLP) in Macau has been under scrutiny recently as investment bank analysts express doubts about its ability to achieve its target market share of 5%. Despite management’s optimism and efforts to increase foot traffic and gaming revenue, questions linger about the property’s performance.
Current Market Share and Performance:
SJM Managing Director Daisy Ho acknowledged that GLP would not meet its 5% target this year. While there has been an increase in the number of visitors to the property, the growth in gaming revenue has been modest. In Q1 2024, GLP only achieved a 2.0% market share, falling short of expectations. Investment bank JP Morgan remains skeptical about GLP’s ability to reach its target share in the near future and has revised its earnings estimates accordingly. This tepid performance raises concerns about GLP’s competitiveness in the Macau market.
Comparison with Competitors:
Ho emphasized that GLP’s casino is relatively new compared to nearby gaming companies, which affects its ramp-up period. However, analysts argue that GLP’s slow growth contrasts with the performance of its competitors. While Ho highlights increases in foot traffic, the key metric remains market share, where GLP trails behind other integrated resorts in Macau. Vitaly Umansky of research house Seaport described GLP’s ramp-up as tepid, indicating a slow uptake in the market.
Expansion and Renovation Plans:
Despite the challenges, SJM remains committed to enhancing GLP’s offerings. Ho provided updates on the comprehensive renovation of the Grand Lisboa property on the peninsula, focusing on food and beverage in the initial phase. This renovation project aims to revitalize the property and attract more visitors over the next two years. Additionally, SJM plans to launch smart gaming tables in its self-operated casinos by the end of the year, leveraging technology to enhance the gaming experience and stay competitive in the market.
The performance of SJM’s Grand Lisboa Palace in Macau continues to draw attention from analysts and industry observers. While management remains optimistic about increasing market share, challenges persist in achieving the ambitious 5% target. Competition from established integrated resorts, slow ramp-up, and market dynamics pose significant hurdles for GLP. However, with ongoing renovation efforts and the adoption of smart gaming technology, SJM aims to improve its competitiveness and position GLP for long-term success in the dynamic Macau market.