Melco Resorts' New Project Initiatives Strengthen Its Competitiveness in Premium Mass Market
We believe the gambling market in Macao will enjoy solid growth in the long term. This structural tailwind is driven by the rising middle class in China and the penetration rate of only 2% in Macao, compared with Las Vegas' 12%. New hotel rooms by major operators in the next few years should accommodate increased and extended visits from bigger spenders from these provinces, and drive the top line for integrated resort operators like Melco Resorts. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, new Hengqin border, and the Gongbei-to-Hengqin extension rail, Macao's carrying capacity for tourists should increase. In addition, neighboring Hengqin Island, 3 times the size of Macao, is under rapid development to complement Macao's growth.
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