Ricardo Chinchilla : I was just wondering if you could comment a little bit more on the promotional environment and how you guys are reacting? Do you guys think that the current reinvestment levels are sustainable? Or this is a lot of, as you mentioned, your competitors trying your — clients do test some of the product before going back to City of Dreams or how do you guys envision the promotional environment? And if there’s a lot of trying versus going back to what they like?
David Sisk : Yes. So Ricardo, it’s David. So look, I think you’re spot on when you say I think there’s a lot of people going out there being a little more promiscuous and going out and trying other properties, understanding what may be out there. So that’s kind of contributed a little bit to that, let’s say, rise in the promotional or reinvestment rates. Also with some of the new products and some of the other things out there, I think again, that in order to get people into that new product a little bit to get people to try that product, whether that’s us or the other concessionaires, you also need to probably be a little bit more aggressive. What we’ve seen, too, is that we’ve had a lot of pent-up demand relative to a lot of our room product, particularly at Studio City, where now we have the opportunity that we didn’t before because we had far fewer rooms, so with the addition of approximately 900 rooms, that’s given us the opportunity to go deeper into our database to go out and be a little bit more aggressive, which is also driving some of our reinvestment rates as well.
But I think over time, that will moderate, as I said, and we’ll probably get back to those 2019 levels.
Ricardo Chinchilla : Got it. You guys provided great color on operating expenses for the Macau operation. I was wondering if you could detail us how much of that amount is related to Studio City just for our modeling? Like why should we — out of some of the costs that you are adding back, how much is specifically related to Studio City?
Geoffrey Davis : Well, maybe to highlight the delta on Studio City. We do anticipate that the incremental cost of having a full quarter of the W in the quarter should be roughly similar to the reduction in Residency Concert Series expenses. So that largely washes out at about 0.2 per day of expense.
Operator: Next question, we have from the line from John DeCree from CBRE.
John DeCree : I think you may have started to touch on this, but wondering if you could provide a little bit more color on the ramp at the W and then even maybe back to the Epic Tower opening? Are you starting to be able to improve segmentation? How has customer reception been to the new hotel towers and pricing, et cetera, if you kind of think about using those to work through and yield up your mix?
Lawrence Ho: John, it’s Lawrence. I think we’re very excited about Studio City Phase 2. But at the same time, we — the reason we’ve opened this kind of piece meal is we’re gradually rolling more and more product into the market. And I think anybody who’s been to Studio City right now knows there’s a major retail renovation going on. And over the next 2 or 3 months, most of those retail tenants will be open. So we’ve been waiting for that. And I think in due course, probably sometime in the first quarter of next year or early second quarter, we will try to do a major property relaunch Phase 2 opening. But I think that is an area that we’re continuing ramping up on. So I think maybe David can add more color or Kevin?
David Sisk : Sure. So look, I think from when we opened up Epic back in April, it finally allowed us kind of a really nice product to go out and develop that premium mass since more VIP business that would, quite frankly, really didn’t have with the Star Tower at Studio City. So the opportunity to really start putting more of those premium players and shifting some of that business away from some of our competitors and bringing that into Studio City is something that’s pretty exciting for us. And the team over there continues to do a good job as we build that business. In regards to the W, what we’ve seen from the start is, we started off at about 70% occupancy during the month of September. We’re now in October, we probably got into about 80%.
We’re looking to try to build that back up until, let’s say, 90% by the time we get to December. But there’s kind of a mix there, it’s a little bit different between what we have, let’s say, it’s probably about a 15% casino business, 85% cash where we’re really looking to try to rely on the Marriott Bonvoy system to bring in some different players or different customers for us. The W also skews to a much different demographic and is particularly popular with women. So we think, again, that this, hopefully, over time, will allow us to continue to expand our database, allow us to continue to attract new customers that ultimately those customers will grow into that premium mass segment, become long-term customers for us. But again, both Epic and with W, we’ve seen a nice pickup within our business, and we continue to see growth.
And in fact, for the month of October was our biggest drop month ever for Studio City as well as our — we had our biggest coin-in month as well in regards to slots. So again, we’ve seen a nice pickup. We’re absorbing the product well. And as said, we look forward as we go forward in December and beyond.
John DeCree : Awesome color. Maybe a follow-up on October. You guys gave us a little bit of color, which is really helpful. Curious if you’ve made any observations relative to ’19 about seasonality or customer behavior before the holiday week after the Halloween. Are things or customers kind of behaving the way you’d expect? Or is it a little different now that we’re 2023 and post-pandemic. Any thoughts on that would be helpful. And that’s all for me.
David Sisk : Yes. So look, when we got into the Golden Week, typically, this year was a little bit early because it started on the 30th of September and kind of rolled into that, let’s say, those first 5 days of October. So a little bit different than we kind of normally see in terms of that. But it was pretty typical as we got towards the end of the Golden Week where you typically see a drop-off, and then about a few days after that, it starts picking up again as you get into that next weekend. So it pretty much played like we thought it would. What I think what’s been nice though is, again, not so much of a surprise, but again, kind of return to normal, where we saw that continue play in action going through the whole month and actually coming into the month of November as well now. So it dropped off a little bit like it used to, and then picked right back up again, which is, again, very similar to what we would have seen in 2019.
Lawrence Ho: I think October, our Studio City drop was an all-time high in the history of the property.
David Sisk : And in Cotai as well.
Lawrence Ho: And in Cotai as well. So I think we are seeing the traction with the water park and the new hotels. And I think once the whole property is completed and hoarded. We’re quite excited about it.
Operator: Next question comes from the line of Praveen Choudhary from Morgan Stanley.
Praveen Choudhary : Good to hear that Macau recovery is ongoing. I have 3 quick questions. The first one is simple. Did you give a timeline for House of Dancing Water opening? Is it first half ’24 or Q2 ’24? That’s the first one. The second question is about the spending per capita trend. We got two data points. One package tour numbers are coming up strongly after being very slow initially. And then someone said that in October 2nd half, the overnight visitors dropped off, hotels are easily available versus day-trippers. So these are two suggesting grind might be doing a little bit better than premium. So love to hear your thoughts. And the last question is, again, Lawrence, what’s going on in Thailand and how is it different from Japan from your perspective if you want to put new money there? Obviously, it’s not next year’s question, but I’m sure you’re working on it.
