Macau Luxury Hotel Has 30 Rolls Royces But No Guests to Ride in Them1 year ago
When planning the opening of a fancy hotel, a lot of boxes must be ticked before the hotel doors can be opened to customers.
Obtaining the proper operating license would seem to be at the top of that list. But it appears that 13 Holdings Ltd. may have mixed up their priorities by first obtaining 30 Rolls Royce Phantoms for their guests with only an occupation permit from the Macau government, while lacking full authority to open for business, according to Bloomberg.
That has left a fleet of more than two dozen Rolls Royces sitting idly, gathering dust, just waiting for wealthy hotel guests to use them. The cost of one Rolls Royce Phantom is in the neighborhood of $400,000, and even with a considerable discount assumed to be negotiated by purchasing 30 of them, we're talking $10 million or so in parked inventory.
Downswing Causes Delay
The new hotel and entertainment complex on Macau's Cotai Strip originally planned on opening in late 2016. A downswing in revenue in Macau's gaming industry for three consecutive years has sounded the alarm bells, as has a slumping economy and a crackdown in money laundering by Chinese government officials.
Coupled with debt problems experienced by 13 Holdings that have left the company scurrying to find funding in order to meet requirements of sufficient working capital, it appears the rolling stock of Rolls Royces will remain in park a while longer.
The situation is "emblematic of the issues that gaming-related companies in Macau face in light of China’s anti-corruption crackdown,” said Thomas Dillenseger, managing director at Alvarez & Marsal, a Hong Kong-based restructuring firm.
Action on the Cotai Strip has improved this year and indications are that offers of financing have been received by 13 Holdings as of late. The company stated that they are "in the process of obtaining necessary licenses and approvals for operation of the hotel and related activities” and anticipate opening sometime later this year.
In the meantime, 30 of the world's finest handmade automobiles remain inactive, waiting for the arrival of wealthy gamblers and businessmen expected to be the hotel's clientele.
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