The additional gaming facilities at Galaxy Macau Phase 4, an expansion of the Cotai flagship casino resort (pictured) of Galaxy Entertainment Group Ltd, are likely to be featured in “boutique” venues “attached to individual hotels,” aimed at meeting premium patrons’ “preference for privacy”.
That is according to a memo from Macquarie Capital, citing updates from Galaxy Entertainment management during the recent Macquarie Asia Conference.
“Phase 4 may incorporate boutique casino formats attached to individual hotels rather than a single large centralised floor, reflecting premium customers’ preference for privacy,” Linda Huang, head of consumer research, Asia, at Macquarie Capital, wrote in the report.
The boutique format has already been adopted in high-stakes gaming areas at the luxury hotel towers Raffles at Galaxy Macau, and Capella at Galaxy Macau, both part of the Cotai property’s Phase 3, per GGRAsia observations. The venues are “Horizon” at Raffles, and “Horizon Plus” at Capella, respectively located on upper floors within the hotel towers.
Macquarie Capital said Galaxy Entertainment’s “base case” for Phase 4 assumes the project might not receive additional gaming tables or involve significant new hiring.
Phase 4 of Galaxy Macau is to include additional casino facilities and approximately 1,350 rooms and suites, along with a 5000-seat theatre, a water resort deck, and fresh food-and-beverage and retail offerings, according to Galaxy Entertainment’s first-quarter results filing.
“Table allocation by the [Macau] government is typically announced around six weeks before casino opening. Management is confident in delivering growth without additional tables through reallocation from low-yielding to higher-yielding areas,” the research note suggested.
It added: “For the Phase 4 project (target completion by 2027, subject to government approval), the base case for headcount planning is primarily reallocation rather than new hiring, supported by structural changes driven by technology.”
A recent research memo from HSBC suggested that Phase 4 of Galaxy Macau, due to be completed in 2027, is expected to open in 2028. According to a report by Hong Kong media outlet Ming Pao, the HSBC note, said to be based on guidance from management of the casino firm, said the expansion was aimed at attracting high-value consumers, particularly from feeder markets in East and Southeast Asia.
In its own memo, Macquarie Capital also cited comments by the casino operator regarding changes in travel behaviour among Chinese premium customers following the Covid-19 pandemic.
“In Macau, premium customers, who previously concentrated their visits during peak holiday periods, are increasingly avoiding crowded periods, leading to a longer tail in the holiday calendar,” the institution said.
It added: “As a result, holidays are increasingly driven by mass customers, while premium customers visit more evenly throughout the year.”
The note also said Galaxy Entertainment had highlighted efforts to appeal to more female customers through upgrades to casino properties, and to younger consumers via “enhanced entertainment offerings”, amid evolving preferences in the post-pandemic era.
It said the casino operator was not seeking gaming market-share gains “at the expense” of earnings before interest, taxation, depreciation, and amortisation (EBITDA) through “rebates and incentives” offered to patrons.
The investment firm also said Galaxy Entertainment’s “strong net cash position” could support a “dividend payout increase”.
