Inside Asian Gaming

INSIDE ASIAN GAMING JULY 2018 34 FEATURES HEIGHT OF LUXURY W E’re not just opening a new hotel today, we’re opening a whole new chapter. We’ve built a landmark for Macau and an icon for Asia. We’re giving people who’ve never set foot on a gaming floor a reason to come here and experience a whole new level of hospitality, culture and entertainment. From day one we’ve been committed to ‘beyond gaming’ like no others. Morpheus is the boldest example of that.” These were the words of Melco Resorts Chairman and CEO Lawrence Ho at the launch of Morpheus on 15 June – a new luxury hotel that is the star of the company’s comprehensive makeover of its flagship Macau integrated resort, City of Dreams. Melco Resorts has spent big on Morpheus, US$1.1 billion big to be precise. To put that level of investment into perspective, Ho himself says it best when he states, “You can build 770 rooms with US$300 million. You don’t need to spend US$1.1 billion and you don’t need the amount of collaborators we had.” Yet in Morpheus, Melco Resorts has a very specific target market in mind, namely the Chinese premium mass customer. According to financial services firmMorgan Stanley, the premium mass segment accounted for 23% of Macau’s total GGR in 2017 at around US$7.7 billion and 32% of EBITDA at around US$2.3 billion. Of that, Melco contributes slightly less than US$1.4 billion in GGR – roughly 18.2% of the pie. The allure of premium mass is simple. Not only do players in this segment bet considerably more than the mass market, operators don’t have to pay the hefty commissions associated with VIP. This is precisely why Melco wants a bigger slice and there is