SJM revises agreement on maximum amount payable for using STDM-owned hotel rooms

The Macau casino operator SJM Holdings has modified its contract with Sociedade de Turismo e Diverses de Macau (STDM), its parent company, to include a clause about the maximum amount it may charge for renting hotel rooms held by STDM. SJM attributes this second change for 2023 to the year’s robust increase in visitor arrivals and increased STDM hotel occupancy throughout the first three quarters.

The updated agreement states that SJM would now pay STDM a maximum of HK$65 million for hotel room services in 2023. Above the prior cap of HK$47.3 million, this is a significant increase. In addition to actual transaction amounts for hotel accommodations, the revision takes into account the company’s strategy-driven increase in gross gaming revenue and visitor arrivals, as well as a contingency for inflation and unforeseen demand.

This adjustment concerns the amount that SJM pays to hotels owned by the STDM Group, including the Grand Coloane Resort, Hotel Lisboa Macau, Hotel Sintra Macau, and Artyzen Grand Lapa Macau. It has to do with hotel room costs that SJM’s selected gaming patrons and guests pay. The nine satellite casinos operated by outside companies under SJM’s license are unaffected by the change, nor are SJM’s independently operated casinos, including Casino Grand Lisboa Palace, Casino Lisboa, and Casino Oceanus at Jai Alai.

SJM highlighted how there is a growing need for hotel rooms and that it wants to keep guests longer in order to grow its clientele. The revised annual maximum for 2023 accounts for projected increases in key metrics, actual transaction volumes, and a contingency for unforeseen circumstances. The 2024 and 2025 annual caps will remain unchanged. In October, SJM also made changes to many leases for retail and casino space with Angela Leong, the Executive Director and Co-Chairman.

Original story by: IAG