MACAU BUSINESS
Reaching that level will probably also require something more than incremental revenue growth. “I think eventually Macau will be able to generate MOP40 billion gaming revenue per month, but that is unlikely in the near term with the lack of capacity addition,” CLSA Asia-Pacific Markets gaming analyst Richard Huang says, echoing other observers. “In 2016, when the new Cotai casinos start opening up, MOP40 billion per month should be achievable.” MGM China Holdings Ltd chief executive Grant
Bowie, whose company is building one of at least six new or expanded multi-billion dollar resorts in Cotai, agrees. “As additional capacity is added to the market in
terms of hotel rooms and other non-gaming attractions, we would expect that this will allow the mass market to continue to grow as we strive to broaden our customer appeal and attractiveness,” Mr Bowie says. “We are optimistic that the Macau gaming market and visitation levels will continue to grow,” he says. The veteran executive highlights some key main
drivers: the economic growth of the mainland resulting in a growing middle class with rising disposable income; infrastructure improvements which can facilitate more convenient travel to and within Macau; and the investments made by gaming operators to solidify the city as a destination market. Government authorities continue to encourage
diversification of Macau’s economy away from gaming. “The Macau and mainland governments are doing so progressively without causing any damage to the industry,” says Ponte 16’s Mr Ma. He likens the changes to Las Vegas’ development in the 1980s and 1990s, as it shifted from primarily gaming to a more well-rounded vacation destination.
New wave
“We saw it happen in Las Vegas when they built the Sands Convention Centre and I think you will see a similar thing here,” Mr Green says.
“The new class of customers is not the hard-core gambler, but a person that sees gambling as part of a range of entertainment that includes fun parks, shows, fine dining and other activities. You will broaden the base to attract visitors beyond hard-core players.” Mr Govertsen says Macau is, and always will be, a primarily gaming-focused tourism destination. According to him, even though non-gaming revenues have been growing rapidly, they are masked by the size of gaming revenues. “However, as the new resorts are developed on
Cotai, we think that the growth of non-gaming will become more obvious, which, in the eyes of the government, is a very good thing. We also believe this will promote healthy broad-based growth of visitation to the market, such as the visitation the integrated resorts in Singapore have generated.” Mr Govertsen, who is based in Macau, warns of
potential risks for the city’s gaming industry, most of them macro-related and largely out of Macau’s control. Such risks could include a slowdown in the mainland’s economic growth, or a resurgence of a medical epidemic like SARS or bird flu. Macau’s table cap is not a limiting factor to long-
term growth, Mr Green argues. “I don’t think the table cap will be a problem. The
Secretary [for Economy and Finance Francis Tam Pak Yuen] says there will be adequate tables for the new properties,” Mr Green, a former gaming regulator in Australia, says. “My reading is that every property will get tables, maybe not all that they want, but at least 300 tables for each property.” Aside from changes in the Cotai skyline, Mr Green
says he does not believe Macau will look very different when it reaches MOP40 billion in monthly gaming revenue. “Given the premise that MOP40 billion will need more properties, you won’t have that much difference on the streets or in the casinos,” he says. “New developments in Cotai will be attractive to
new visitors. But I don’t think another 50,000 visitors a day will suddenly be coming through the doors.”
28 JUNE 2013
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66