(Bloomberg) — Melco Crown Entertainment Ltd. Chairman Lawrence Ho, son of Macau gambling tycoon Stanley Ho, said it’s “crucial” that its USD 2.1 billion City of Dreams casino defies the global recession and has a successful opening.
“We know the pressure is on us,” Ho said today in a Bloomberg Television interview in Macau. “The success of it will have major implications.”
Melco Crown, a joint venture between 32-year-old Ho and Australian billionaire James Packer, will open the casino in June, braving the worst global slump since World War Two and Chinese curbs on travel to Macau, the world’s biggest gambling hub. City of Dreams is located on Macau’s Cotai Strip, where Las Vegas Sands Corp. suspended construction of its partially-built gaming properties in November as credit markets seized up.
“In terms of China’s political matters, these are definitely out of our hands,” Ho said. “The bleakest days of the industry are past us, which was the fourth quarter.”
Melco Crown dropped 19 cents, or 4 percent, to USD 4.59 at 4:29 p.m. New York time in Nasdaq Stock Market composite trading. The company plans to raise as much as USD 400 million selling American Depositary Shares, it said separately in a regulatory filing yesterday.
Gambling revenue in Macau, a former Portuguese colony that is the only region in China where casinos are legal, has fallen for the past year after the mainland tightened visa rules for visitors to the city. The decline in arrivals from China has compounded the effects of the global slowdown, which has dampened demand from Taiwan and South Korea.
Growth in China, the world’s third-biggest economy, probably cooled to the slowest in almost 10 years in the first quarter, as a global recession led to a collapse in exports. Gross domestic product grew 6.3 percent from a year earlier, according to the median estimate of 12 economists surveyed by Bloomberg News.
Macau’s economy shrank 7.6 percent in the fourth quarter of 2008 as a result, the first contraction since June 2003, according to figures compiled by Bloomberg.
Still, the decline in monthly casino revenue has moderated, dropping 6 percent in March from a year earlier to 9.5 billion patacas (USD 1.2 billion), from a 15.5 percent fall in February and 17 percent decrease in January, figures from the Portuguese news agency Lusa show.
Hotel occupancy rates in February also fell 2 percent from a year earlier, the smallest drop in seven months, figures from the Macau Statistics and Census Service show.
Government officials from the southern Chinese province of Guangdong, Macau and Hong Kong met in February, agreeing to enact measures allowing more mainland residents to visit the two cities. Guangdong may allow its residents to travel to Macau and Hong Kong more frequently in a policy that might be put in place before China’s week-long Labor Day holiday in May, Ming Pao reported on Feb. 20.