Melco posts solid growth in first quarter

In the recent first-quarter conference call, Melco Resorts & Entertainment announced substantial growth in Macau and an aggressive ramp-up in Cyprus.

During the analysts’ briefing on Thursday, CEO Lawrence Ho expressed confidence in the company’s performance, stating they delivered “a solid set of results for the first quarter that underscores our strengths and growth potential.”

As a prominent player in the gambling industry, Melco operates integrated resorts in Macau, Manila, and Cyprus, with plans to launch a casino in Sri Lanka later this year.

Melco’s market share in Macau has surged from 14.7% in Q4 2024 to 15.7% in Q1 2025 and maintained stability throughout April. This growth trajectory is mirrored by a staggering 32% increase in Property EBITDA quarter-over-quarter.

Throughout the quarter, the mass drop significantly intensified, achieving record highs at both City of Dreams and Studio City. This momentum has carried into April, coinciding with the Golden Week holiday, celebrated from May 1-5 in China.

Despite the debut of new competition, particularly the Londoner Grand, which targets the premium mass segment, Melco’s resorts experienced a remarkable 30% year-on-year traffic growth.

Ho commented, “I don’t think there’s been any cannibalization or material impact from the Londoner. We’ve reconnected with our core identity.” The triumphant return of the House of Dancing Water, Melco’s flagship show at City of Dreams Macau, is projected to attract an additional 4,000 visitors daily. “Further initiatives to enhance foot traffic include revamping our retail areas and renovating the main entrance at both City of Dreams and Studio City,” he added.

Following successful renovations at Studio City, which have now concluded, the sequential increase in Property EBITDA is a testament to the positive outcomes of these strategic initiatives. Melco is indeed “firing on all cylinders in Macau.”

Market Adaptations in Manila and Cyprus

Addressing the increased competitive pressures in Manila, Ho stated, “We are recalibrating our cost structure and refining our marketing strategies to enhance the EBITDA contributions from this segment.”

Melco is actively pursuing the sale of its integrated resort in the Philippines’ Entertainment City casino zone, aiming to liberate capital for potential expansion in Thailand, contingent upon regulatory changes permitting gaming resorts.

“Potential buyers are currently signing NDAs,” noted Ho. “We will gradually streamline this group into a shortlist for the bidding process and will update the market when we have further announcements.”

On a brighter note, the City of Dreams Mediterranean in Cyprus reported a commendable 10% year-over-year growth in Property EBITDA for Q1. Ho mentioned that despite ongoing geopolitical tensions affecting tourism—stemming from the conflicts in Ukraine and the Israel-Hamas situation—the Melco property is gaining traction, with summer bookings significantly surpassing last year’s figures. “Our outlook for Cyprus remains optimistic for the remainder of the year,” he affirmed.

Finally, preparations are on track for the much-anticipated launch of the City of Dreams Sri Lanka casino, with a target opening in the third quarter.

Future Strategies: Rational Reinvestment in Macau

Looking ahead, Ho emphasized that Macau concessionaires are adopting a “more rational” approach to market reinvestment for 2025.

“In the post-COVID era, we initiated cautiously but overextended our reinvestment last year. As we focus on offering a premium experience, we acknowledge that being overly aggressive in marketing is not the way forward,” he explained. The company prides itself on operating two of Macau’s finest hotels—City of Dreams and the brand-new Epic at Studio City, complemented by family-friendly amenities like an indoor water park.

“The non-gaming attractions that we developed years ago are now pivotal for our future growth,” Ho stated. It is critical to remain disciplined and prioritize margin improvements.

Support from the Chinese government through recent stimulus measures is providing a further boost. “Chinese policy is our main focus, even more than the overall economy,” Ho concluded. With Beijing’s ongoing support aimed at bolstering domestic consumption, discretionary spending, and travel, these elements are crucial for Melco’s sustained success.