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MACAU BUSINESS by Paulo A. Azevedo in Las Vegas The long haul


MGM Resorts International is placing its biggest bets in Asia. The company’s Macau joint venture with businesswoman Pansy Ho Chiu King will soon launch its IPO in Hong Kong, while it also eyes developing a hotel-casino resort in Cotai. In this exclusive interview with Macau Business, James Murren, chairman and chief executive officer of MGM Resorts International, talks about the future and the painful obstacles the company must overcome in Macau and the United States in order to achieve their great comeback


businesswoman Pansy Ho Chiu King in MGM Grand Paradise]. We wanted to build something of the highest possible quality and it took some time to do that. The results of the facility speak for themselves. We are clearly one of the highest quality resorts in the city and we want to be much larger in Macau. Do I wish that we had more resorts or a bigger footprint right now? Of course I do. Looking back to what has happened to the market, we wish we had more investment [in place] already. This is not a sprint; this is a marathon. We are very bullish on Macau for the long term and we intend to be there for decades to come.


Nevertheless, how anxious are you to have a property in Cotai?


We are extremely excited about the prospect of being in Cotai. We think that it is going to be an important element of development there. It is not for us to decide that however. It is up


M


acau’s gaming revenue grew by more than 50 percent in 2010. Every year since market liberalisation, the city has posted a new gaming revenue


record. How great would it have been for MGM Resorts International to have invested in more properties in the territory some years back or have already advanced to Cotai? James Murren - We were not an original


concessionaire. We did not have the opportunity to invest earlier than we did. As soon as we did have the opportunity, we invested right away as a joint venture [with


22 FEBRUARY 2011


to the government to decide whether they want to secure more sites for casino developments and, if so, whether MGM [Grand Paradise] would be one of the selected companies. We think that the prospects for us to be in


Cotai are bright. We know that we are moving down the path and we hope that we will be fortunate enough to be there. However, it is very important that we do not think of this as the only opportunity to grow in Macau. There are more opportunities on the peninsula and throughout the SAR in general. We are keeping our eyes open.


When do you expect an answer from the Macau government?


I do not have any expectations. I have learned


in Macau that I cannot speak for the government. We are hopeful that it is a matter of months not years, because we are excited and anxious. We would love to be in Cotai and we will be prepared if we are allowed to be there.


The partner play MGM Resorts International is heavily


targeting the mainland market, with several new hotels. Beijing by August 2011 and then Sanya, Tianjin, Chengdu and Shanghai, just to name a few, all in a four-year period. It shows a lot of confidence in that market.


We do have an awful lot of confidence in the


Chinese economy and in the growth of the hospitality business in China. Part of our confidence in the opportunity there is by virtue of our partner, the Diaoyutai State Guesthouse. We formed this partnership three years ago, long before many were contemplating attempting to develop hotels in the mainland. The partnership has now secured 19


different projects. But there are many others in the pipeline given the robust nature of the Chinese economy and the opportunity for urban development. By 2020, there will be 220 cities in China


with over a million people. The connectivity between those populations through the high- speed train network and the successive hotel developments that are already operating today, with many more underway, gives us great confidence. Per capita incomes have been soaring, the


propensity to spend is rising and the attractiveness for brands is well known. What has become very apparent is that the history of


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