Casino group Melco Resorts & Entertainment said Tuesday that operating costs (Opex) are likely to increase “moderately” in the second half of this year in the group’s second-quarter earnings release.
“Our operating expenses in Macau went from about $2.7 million to $2.9 million a day,” said Jeff Davis, the company’s chief financial officer. “Most of the increase is due to higher labor costs,” he said, which included a 2.5% pay increase for existing employees and “additional employment” during the period.
“We think that over the second half of 2024, we’re going to be down to around $3 million by the end of the year,” Mr Davis said. 동행복권파워볼
Competition among Macau operators is increasing, with companies spending more on promotional and reinvestment activities, especially for customers in the premium mass sector, according to industry commentators.
But Melco Resorts Chairman and Chief Executive Officer Lawrence Hou Yau Loong said the company was focused on quality of service rather than public relations spending.
“We’ve been incredibly trained in player reinvestment. We’re laser focused on the best incremental margin per reinvest dollar,” Ho said on Tuesday’s conference call.
“Of course Macau is a very competitive environment, and I think we’ve decided to focus on competing in the services, the quality of the resorts, the amenities we offer,” he added.
Evan Winkler, president of Melco Resorts, said on the call that the group was “not raising” the total spending level for its promotional activities.
In the three months to June 30, player reinvestment in the Macau market did not accelerate but “remained high through the second quarter,” Mr Winkler observed.
“I think in the long run we’re probably in an uptrend in the history of the market and we continue to believe that eventually we’ll unwind and come down,” he added. “I don’t think it’s necessarily a significant drop in the short term, but it’s not an uptrend.”