Foreign investors build up Macau's casino biz
HONG KONG Macau, the former Portuguese colony that was returned to Chinese rule in 1999, was always the modest cousin to Hong Kong. Its big draw was tourism and gambling that drew locals looking to get away from the big-city buzz.
But that was then, and now Macau’s gaming biz brings in more than Las Vegas and attracts multinational investors.
The liberalization of the gaming industry in 2002 saw six concessions and subconcessions granted to local and, more importantly, foreign companies. In five years, Macau saw foreign-backed casinos and resorts such as the Crown, Wynn Resorts, Sands, MGM Grand and the Venetian transform the local gaming industry with glitzy Las Vegas-style hotel resorts, while local businesses responded by building new and improved casinos such as the Grand Lisboa and theme park/casino Fisherman’s Wharf.
All the investors are banking on the arrival of millions of mainland Chinese tourists, who, armed with cash-filled suitcases, can now travel to Macau under the Full Independent Tour plan with relative ease. The numbers certainly suggest their bets are correct: In 2005, 10.5 million visitors arrived from China alone, and in 2006 Macau overtook Las Vegas in casino revenues as the gaming industry generated $6.8 billion.
“The tourism industry is one of the main pillars of Macau’s economy, and last year, a new record of close to 22 million visitors came to Macau, an increase of 17% compared with 2005,” says Eng Joao Manuel Costa Antunes, director of Macau Government Tourist Office.
Macau’s ascendancy also is threatening Hong Kong’s position as an entertainment hub, especially since the opening of the $2.4 billion Venetian Macao. In 2007, the Venetian staged a series of high-profile entertainment events such as sports exhibitions with English soccer team Manchester United, NBA teams the Orlando Magic and the Cleveland Cavaliers plus tennis champs Roger Federer and Pete Sampras as well as perfs by music superstars Beyonce and the Black Eyed Peas.
Hong Kong is beginning to feel the heat. Registered number of visitors for Macau in September was 2.27 million, over 145,000 more than Hong Kong. But Macau still has to pay some more dues before it can call itself a truly international destination: Only 9% of visitors were from outside the region during September.
But Macau investors are pouring in the money with such initiatives as an original production by Cirque du Soleil and a Celine Dion gig skedded for early ’08, and more entertainment-themed casinos such as Macao Studio City, which is under construction.
“Most major entertainment events (were) planned with visitors in mind, even before the (recent) boom,” says Gary Ieong, an events organizer in Hong Kong whose roots lie in Macau. “The locals are more interested in Cantopop acts than huge international stars.”
With luxury hotels, such as the Four Seasons, Sheraton, Hilton and Shangri-La all hoping for a slice of the profits, Macau is certainly getting ready to receive these big-spending visitors in style.