No one wants an “average sized” room. Or so the critics say who are assessing the accommodations at the MGM Cotai in Macau. Unless they get on board with larger suites, there future prospects are dim.
A bearish mood has been displayed about the resort’s room sizes. Analysts fear that they will ultimately lose out to the competition as a result. According to a report by GGRAsia, Australian investment bank Macquarie Capital Ltd.stated,
“[MGM Cotai] may be too base masscentric, and given limited cross-play/traffic on Cotai versus the peninsula, the property’s core room sizes may not attract enough quality overnight guests needed to quickly ramp EBITDA [earnings before interest, taxation, depreciation and amortization].”
The uproar seems to revolve around the 463-square-foot spaces that are not likely to appeal to denizens of other Cotai resorts. Such small rooms account for a small proportion of accommodations, existing only on the premises of five operators out of eighteen.
The report recommends renovating to attract higher quality customers, the ones with the big funds to spend. Certainly the MGM Cotai doesn’t want to lose them to better arrangements.
On the subject, the U.S.-based investment bank, Jefferies LLC, agrees with the prognosis. VIP junket rooms and mansion suites will draw the right crowd.
Meanwhile, MGM Cotai seeks to add smoking rooms. Regulations in Macau so far are not in place to accommodate this mission. Everything will help the resort bring in new customers. Only change will impact the dim financial picture.