Melco Crown boosts pay for non-management employees

Melco Crown Entertainment has followed Macau rivals in announcing a pay rise for non-management employees, as analysts warn cost pressures in the territory are on the rise again.

The company, which operates the City of Dreams and Studio City, said pay will rise from 2.5 percent to 7 percent for all eligible employees from April 1.

Employees earning a monthly income of up to MOP16,000 ($2000) will receive a pay increase of MOP500 per month, while employees earning more than MOP16,000 per month will receive an increment of 2.5 percent.

In addition to the pay increment, MCE has been offering an Employee Loyalty Program since 2014. The program has allowed eligible employees to choose either a summer time payment that is equivalent to one additional month of salary or a “Golden Nest Egg”, which is a program that offers six months of pay after three years of continuous service with MCE.

The company, which also runs City of Dreams Manila, also said it had been reviewing remuneration of staff there and will make an announcement in the next few months.

Melco follows, Sands China, Galaxy Entertainment and MGM China in announcing pay increases for staff.

Morgan Stanley in a recent note warned of margin pressure in Macau as promotional expenses are rising on the back of the upturn in the VIP market and as wage inflation increases with demand for staff to fill newly opened resorts.

The firm said staff costs rose by 5 percent in the second half of last year with the opening of the Wynn Palace and the Parisian. It sees a further 8 percent gain in wage costs this year as further openings pressure an already tight labor market.

“Promotional allowances rose to a record-high level in 4Q16; so did advertising and marketing expenses in 2H16, rising for the first time in two years,” it said. “Together with VIP revenue growing faster than mass, we see margin pressure in 2017,” it said.