x Abu Dhabi, UAEFriday 28 July 2017

Chinese dragon fuels Macau tourism boom

Building Brics: Macau is booming as Chinese tourists flock to the island, where gaming is allowed. But the government is keen to widen its tourist appeal.

Galaxy Entertainment Group invested HK$16.5 billion for the first phase of Galaxy Macau, above, which opened last year. Jerome Favre / Bloomberg News
Galaxy Entertainment Group invested HK$16.5 billion for the first phase of Galaxy Macau, above, which opened last year. Jerome Favre / Bloomberg News

Some 25 million visitors from the greater China came to the territory, where gaming is allowed, last year and hoteliers are moving fast to tap the economic growth. But the government is keen to widen its tourist appeal, Daniel Bardsley, foreign correspondent, reports from Macau.

Half a dozen cranes stretch into the sky, diggers move like robots across the earth and scores of piles have been pounded into the ground.

Beyond this vast building site stands a series of brown, white and black towers, while trees cover the hills on the far side of a narrow stretch of water to the right.

This is Cotai on the islands of Macau, the entertainment playground for mainland Chinese.

Billions of dollars have been pumped in to create these hotel resorts on what a decade ago was swampland. The area features a series of projects that are recently completed or set to open.

Construction teams are crafting the second phase of Galaxy Macau, the first phase having opened last year after an investment of HK$16.5 billion (Dh7.8bn) by Macau's Galaxy Entertainment Group.

A few minutes' drive away, Wynn Resorts has put up signboards for its Cotai project, which was granted approval by the Macau government a month ago and is set to have 2,000 hotel rooms and a shopping mall.

In April, Las Vegas Sands opened its flagship US$5bn (Dh18.36bn) Sands Cotai Central, the most expensive resort, five years after it launched The Venetian, one of Cotai's biggest properties.

"There are 22,000 hotel rooms in the whole of Macau but last year we had 28 million visitors, so the rooms were still heavily occupied," says Joyce Fung, the senior manager of media relations at Galaxy Entertainment Group.

Macau is the only area of greater China to permit gaming and the bright lights of the former Portuguese colony, a special administrative region of China since 1999, have long attracted those with money to burn.

But space on peninsular Macau to the north is at a premium and in 2006 the first hotel opened on what is now known as the Cotai strip, a largely reclaimed area that now links Macau's two islands, Taipa and Coloane.

Last year, visitor numbers to Macau jumped 12.2 per cent to 28 million on the year before, while the territory's economy grew faster than any country's - 20.7 per cent.

"The market demand is still very big," says Ms Fung.

The major aim is to encourage tourists to stay longer in Macau but this is not easy as there are regular shuttle buses to and from the Chinese mainland border, while Hong Kong is just an hour away by ferry.

"The average stay in Macau is only one night," says Ms Fung. "You can visit Macau during the daytime and spend the night in Hong Kong.

"The target is to attract guests to stay longer in Macau. It's not only our target but the target of the government - how to attract them."

This is why the latest hotels are branded as "integrated resorts" with the likes of Galaxy Macau offering everything from shopping malls, small cinemas, holiday villas and a huge swimming pool with waves and a beach - on the roof.

The Venetian has a vast array of internal waterways complete with gondolas and singing gondoliers, while the Sands Cotai Central features magicians and stilt-walkers moving among the tourists.

"You can relax here. There are enough spas and resort things. Also, we love shopping so we prefer it here," says Shravanthi Velaga, 32, a housewife visiting The Venetian resort from her native India.

While Macau tourists from India are increasing, Chinese visitors are driving the huge growth in revenues and numbers. Last year, 25 million tourists came to Macau from greater China. That was a 13.5 per cent increase on 2010.

Officials are keen to reduce their reliance on visitors from mainland China but this is a challenge.

"Around 90 per cent [of customers] are from mainland China," says Derek Yang, the assistant store manager at Sands Cotai Central's Michael Kors outlet, which sells high-end clothing and accessories.

"Here is tax-free. Many customers will look at shops in mainland China and come to buy here."

The development of the Cotai strip is benefiting neighbouring areas, among them Taipa Village, an attractive traditional area with Portuguese-style buildings amid residential high-rises on one side and resort hotels on the other.

"Now it's more alive, more people are coming here," says Esti Utami, 31, an Indonesian who has lived in the village for seven years and runs a restaurant.

"There is a lot more activity here. The village has a European style and they come here for the restaurants."

While the Cotai developments have offered a boost for Taipa Village, where workmen are refurbishing a number of buildings on the main street, things may have become more difficult for some shops on Macau peninsula, which has a number of ultra high-end malls housing luxury brands. The Cotai resorts, with their upmarket shops, provide heavy competition.

"Our business has maybe dropped around 10 per cent compared to before," says Jeff Lam, a supervisor at one of the luxury stores at Wynn Macau. But he still believes the development of Cotai is likely to be positive in the longer run.

"The projects can attract more people to come to Macau and may bring benefits to our shop as well. The negative impact may just be short term," he says.

The University of Macau predicts this year's economic growth will be 18 per cent and unemployment will remain at just 2.5 per cent.

With mainlanders fuelling the boom, Macau has plenty to thank its Chinese cousins for.


twitter: Follow and share our breaking business news. Follow us

iPad users can follow our twitterfeed via Flipboard - just search for Ind_Insights on the app.