Casinos on Macau’s Cotai Strip rebound quickly from typhoon

Updated August 24, 2017 - 5:19 pm

The more modern buildings of Macau’s Cotai Strip weathered the high winds of Typhoon Hato better than older structures on Macau’s peninsula and casinos there were operating close to normal Thursday.

Grant Govertsen, a gaming industry analyst with Las Vegas-based Union Gaming, did a walk-through tour of casinos on the peninsula and on Cotai Thursday and in a report to investors said many full shuttle buses were arriving at casinos operated by Las Vegas Sands Corp. and Wynn Resorts Ltd.

“Many of the flagship casinos on the peninsula were either closed or barely operating, while it was more or less business as usual on Cotai, with mass foot traffic broadly inline with a normal midweek afternoon, although some were without air conditioning, which didn’t seem to faze guests,” Govertsen said.

“With this in mind, we would expect a temporary dramatic share shift toward Cotai as it could take a few days for the Macau peninsula to get back on its feet,” he said.

Typhoon Hato made landfall at around noon Wednesday with 100 mph winds and driving rain that damaged both of Macau’s ferry ports and flooded streets.

Searching for trapped people

Rescuers on Thursday searched submerged cars for trapped people in the former Portuguese territory, while overwhelmed emergency services scrambled to respond to crisis calls.

Many residents and tourists complained that the government was woefully unprepared for Typhoon Hato.

Macau’s government broadcaster TDM said Typhoon Hato, a maximum signal 10 storm, was the strongest since 1968 to hit the world’s biggest gambling center, home to around 600,000 people.

“The city looks like it was just in a war,” said one civil servant, who declined to be named as they were not authorized to speak to the media.

At one stage, as Hato intensified, Hong Kong posted a signal 8 storm warning, saying it was likely to go higher, yet Macau’s government rated Hato only a signal 3 typhoon.

Chief executive Fernando Chui, at a news conference on Thursday evening, announced the resignation of Fong Soi-kun, director of the Meteorological and Geophysical Bureau.

New buildings benefited

Buildings on the Cotai Strip, dominated by properties operated by Las Vegas Sands, have been built in the last 10 years on streets much wider than those on the peninsula.

The Venetian Macao, Sands Cotai Central and the Parisian, all operated by Sands, and Wynn Palace are located along the Cotai Strip.

Govertsen said there is some concern that MGM Cotai, a $3.1 billion resort under construction by MGM Resorts International and due to open later this year, could be slightly delayed.

“While we don’t believe MGM Cotai experienced any worse damage than any other property in the market, the sudden surge in demand for construction labor could result in a slight delay for this project,” he said.

With worse damage on the peninsula, the companies most affected by the storm are MGM China, whose MGM Macau property was partially operational on Thursday, and SJM Holdings, controlled by longtime Macau casino owner Stanley Ho, whose Lisboa and Grand Lisboa properties have been closed.

Govertsen said Wynn Macau, located near the Lisboa, appeared to have more gaming space operating than other peninsula operators.

Results in Macau are important to the three local companies because a high percentage of revenue is generated by Chinese gamblers and tourists. Company stocks had mixed results Thursday.

Las Vegas Sands closed up 35 cents, 0.6 percent, to $60.24, then dipped 14 cents, 0.2 percent, to $60.10 in after-hours trading. MGM was up 23 cents, 0.7 percent, to $31.55. Wynn stock was down 65 cents, 0.5 percent, to $134.10, then gained 33 cents, 0.2 percent, to $134.43 after hours. Volume was light for all three companies.

The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson.

Reuters contributed to this report. Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

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