Melco Resorts & Entertainment has revealed plans to transform Altira Macau from a VIP property to premium mass following another quarter of subdued results for its original Macau resort.
The company detailed the move during its 2Q21 earnings call with analysts, in which it confirmed that both junket and VIP direct operations at Altira have already been shut down and moved to City of Dreams and Studio City.
Gaming areas not already serving the premium mass customer will be reallocated, as will non-gaming assets.
The move comes after Altira reported little movement in 2Q21, with revenue of US$18.3 million only slightly higher than the US$17 million generated a year earlier and the property recording an Adjusted EBITDA loss of US$17.3 million.
Melco’s Chief Operating Officer – Macau Resorts, David Sisk, said it no longer made sense for Altira to remain VIP-focused given prevailing market conditions.
“The idea is to take out a lot of the volatility given the kind of reduced volumes that we’ve been seeing over the last 18 months in the VIP business that created a lot of fluctuations [at Altira],” Sisk said.
“And unfortunately we’ve been on the negative side of the whole equation, which has really exacerbated the losses over there. It’s just too much, we were essentially gambling in a way that didn’t make a lot of sense.
“So the idea is us going back in and kind of rethinking our business and really focusing in on where our bread and butter is and has always been. At Melco, we’ve always prided ourselves on developing great products and really focusing on our premium customers, particularly our premium mass customers and our mass customers, and that’s where our profitability is.
“We think given the product over there, the product mix and the opportunity to continue to grow that local market as well as the market that we have over there in terms of the international, is really compelling for us.
“It is kind of creating a boutique experience for our guests there. They’re looking for something a little bit different than maybe we have in Cotai, but it’s just a really unique opportunity for us to do that. We thought this was a good time for us to make this move and move forward with this new area for our business at Altira.”
Altira was opened in May 2007 as Crown Macau, before changing its name to Altira two years later following the opening of Crown Towers Macau as part of the City of Dreams development.
The partnership between Melco and Australia’s Crown Resorts ended in 2017 when Melco bought out all of Crown’s shares in the joint venture.