Travellers Int’l posts massive losses, looks for recovery

Metro Manila in the Philippines could soon start to step out from under its severe Modified Enhanced Community Quarantine (MECQ) as early is this Wednesday. That is potentially good news for the casino sector, which has been suffering in agony more than its counterparts in other countries because of the prolonged stoppage caused by the coronavirus pandemic. The first half of the year has been excruciatingly painful for the gambling industry and the sooner it can get back on its feet, the better. Travellers International Hotel Group, which operates Resorts World Manila (RWM) in the Philippines, knows this, as well, as its financial health has turned extremely weak this year. According to its latest earnings statement, its losses almost equal those of its gains from a year earlier. 

Second-quarter revenue from gaming operations at Travellers, which is owned by Alliance Global and Genting Hong Kong, dropped 91.5% year-on-year. It only got up to $11.6 million by the end of the three-month period, whereas, in the second quarter of last year, the entity reported revenue of $136.5 million. Alliance Global provided the figures, as Travellers delisted from trading late last year.

The first half of the year saw a 54.8% decline by Travellers. $125.82 million was taken in, which is a substantial drop from the $278.38 million a year earlier. Alliance added that its first-half net gains declined “59 percent year-on-year to PHP4.4 billion [$90.4 million] as gaming operations were suspended from mid-March in compliance with the lockdown measures set by the [Philippine] government.” Non-gaming revenue was slashed, as well, losing 44% of the revenue reported a year earlier. With the quarantine forcing greatly reduced activity, this revenue came in at only $34.9 million.

Alliance explained of the results, “Travellers … among all the business segments, was hit the hardest by the pandemic-related measures imposed by the government that closed most businesses it has in Resorts World Manila which are considered non-essential. The theatre, cinemas and retail outlets were closed and MICE [meetings, incentives, conferences and exhibitions] activities stopped during the ECQ [enhanced community quarantine]. Hotel operations continued at limited capacity, following government-mandated restrictions.” The result was a flip of activity that made revenue coming from Travellers unable “to support the costs and expenses” of operating RWM.

Partly due to the reduced performance at Travellers, Alliance was forced to report a drop in its net profit. The second quarter was down 77.6% year-on-year, going from $77.06 million last year to $17.22 million this year. At this point, everyone is watching to see if MECQ is actually dropped in favor of a General Community Quarantine, which would at least allow some movement to help jumpstart the economy.