Macau’s gaming concessionaires have committed to invest about $13.6 billion in new non-gaming attractions through 2033, part of a plan to turn the city into a world center of leisure, tourism and business. But operators should avoid “repetitive” investments if they expect to reap the rewards, says MGM China President and COO Hubert Wang.
Wang spoke before representatives of all six operators at the recent MGS Summit on a panel called, “Pioneering a new Macau.”
“I think the investment is affected by the ‘Pareto principle,’ where only 20 percent of the investment will produce 80 percent of the impact,” he said. “We are always looking for that 20 percent in our investments.
“Our macro investment is already known and will not decrease,” he continued, “but micro adjustment is necessary to pay attention to the future changes of tourists. I think that Macau’s concessionaires should avoid repetitive investments.”
If multiple operators invest in similar attractions, they could undercut profits, he observed. “Some will focus more on concerts and some will focus on the arts. But we should complement each other’s offerings.”
According to Inside Asian Gaming, Sands China President and Executive Director Wilfred Wong said concerts may not be profitable on their own, but add to the mix. “If we can organize popular concerts, all the concessionaires will benefit.”
Frank McFadden, SJM’s chief operating officer for gaming and hospitality, agreed with some pundits that operators alone cannot create a more diverse economy, one that is less reliant on a single industry—gaming—to prosper. He called for a “visitor experience ecosystem” that reduces barriers to travel for visitors.
“All the elements, from service providers to transportation, operators, and government need to work together to ensure that the ecosystem works and provides a memorable experience” for foreign tourists, he added. “If one of the parts doesn’t work, the entire ecosystem doesn’t function, despite the individual efforts. … This still needs a lot of work.”
According to GGRAsia, the operators’ multibillion-dollar investments were required as part of their current 10-year gaming concessions, which began January 1. The Big 6 concessionaires will spend a total of MOP118.8 billion (US$14.9 billion), with about 91.5 percent going to non-gaming initiatives.
Wang said operators must “tweak and adjust” their investments to “accommodate eventual new trends, challenges and opportunities.
