Hac Sa Bay

3rd Macau-Taipa bridge

Macau-Taipa bridge

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MACAU

TAIPA

Melco PBL Entertainment (50:50 joint venture)

Restaurants, spa, 28 VIP suites, 8 presidential villas

Sociedade de Jogos de Macau Restaurants, health club, spa,

function rooms. Linked via walkway to the old Lisboa

MGM Grand Paradise (50:50 venture,

MGM Mirage / Pansy Ho Chiu-king)9 restaurants, theatre, nightclub, spa and 13,500 sq ft of meeting space

SJM 51%, Macau Success 36.75%, Joy Idea 12.25%

Sofitel, restaurants, pools, 540,000 sq ft retail plaza

Las Vegas Sands Corp7 restaurants and bars

Crown Macau Ponte 16

Grand Lisboa Sands Macao

MGM Grand Macau

Las Vegas Sands Corp1.2m sq ft convention centre,

15,000-seat stadium, 1,800-seat theatre, 1m sq ft of retail space, 20 restaurants, spa, 3 indoor canals

The Venetian

Wynn Macau

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3Galaxy

Entertainment Group8 Asian restaurants, spa, karaoke lounge, nightclub, fitness centre

Wynn Resorts7 bars and restaurants, luxury

retail, meeting and banquet halls, spa, fitness centre, performance lake,

85,000 sq ft more casino space

SCMP GraphicSources: Companies, SCMP

Wynn Macau

Sands Macao

Grand Lisboa

Lisboa

Venetian

Crown Macau

MGM Grand Macau

Ponte 16

Galaxy StarWorld

Opens: April 2007Cost: HK$2 billion

Storeys: 32Hotel rooms: 227Tables: 200Slots: 1,000

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Opens:Casino: December Hotel: 3Q 2007Cost: HK$3 billion

Storeys: 47Hotel rooms: 430Tables: 300Slots: 100

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Opens:Casino: 2Q 2007 Hotel: 4Q 2007Cost: HK$2.4 billionStoreys: 20Hotel rooms: 420Tables: 180Slots: 300

4 Opens: 2nd half 2007Cost: US$975 million

Storeys: 28Hotel rooms: 600Tables: 300Slots: 1,000

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Opened: May 2004Cost: US$365 million

Storeys: 8Hotel rooms: 51Tables: 740Slots: 1,254

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Opens: Oct 2006Cost: HK$2.95 billionStoreys: 33Hotel rooms: 500Tables: 290Slots: 371

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Opens: 2Q 2007Cost: US$2.3 billionStoreys: 39Hotel rooms: 3,000

Tables: 700Slots: 6,000

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Opened: Sept 2006Cost: US$1.2 billion

Storeys: 24Hotel rooms: 600Tables: 200Slots: 350

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rownMacau

rand Lisboa

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GM Grand Macau

ands Macao

tarWorld

he Venetian

ynnMacau

PearlRiver

estuary

Macau

20 mins 55 mins

Hong Kong to Macau

HongKong

MACAU MAKEOVERMACAU MAKEOVERMACAU MAKEOVERMegaresorts opening Megaresorts opening in the next 12 monthsin the next 12 monthsMegaresorts opening in the next 12 months

“New casino a gambler’s paradise”,ran the headline in this newspaper,and the accompanying article con-veyed the sense of eager anticipa-tion in Macau before the opening of“what can easily be considered asone of the most luxurious and com-fortable casinos in the world”, ac-cording to the report.

“A visit to the place will convinceanybody that a fortune must havebeen spent to build such a gamblinghall, which the city would neverdare dream of only a few years ago,when the gambling franchise wasunder the control of another com-pany.”

Indeed, when the iconic 12-sto-rey circular tower of the Casino Lis-boa threw open its doors at 11am onJune 11, 1970, it marked a revolutionin Asian gaming and a new era forMacau. The brainchild of StanleyHo Hung-sun, who in 1962 alongwith partners Yip Hon, Henry FokYing-tung and Teddy Yip nabbedthe gaming monopoly away fromthe Fu family’s Tai Xing group aftera four-decade rule, the Lisboabrought the casino industry out ofthe enclave’s scattered backroomsand dressed it up in lights.

Thirty-six years later, Macau isset for a new makeover and it is theformer monopolist’s turn to getone-upped in even grander fashion.Last week, Las Vegas casino mag-nate Steve Wynn opened the first ina long pipeline of megaresorts thataim to do nothing short of redefinegaming and leisure in Asia.

The US$1.2 billion Wynn Macauis the enclave’s first Vegas-calibreresort, with 600 hotel rooms (thesmallest is 600 square feet and costsHK$1,600 on a weeknight), sevenbars and restaurants, meeting halls,a spa, luxury retail shops, two heat-ed outdoor pools and a three mil-lion litre fountain (or “performancelake” in Las Veganese) at the en-trance.

“Now, someone would say:‘Look, the people who have beenpopulating this city and its gam-bling halls have not stayed at [high-end resorts] when they’re in Ma-cau,’ ” Wynn Resorts chairman andchief executive Steve Wynn said inan interview.

“Well the fact is, how could they?They’re not here. There’s nothingunusual about the Wynn hotel inMacau as it relates to its customersor anything else … it’s just that it isthe first one.”

Indeed, Wynn’s is only the firsttoss of the dice betting on the newMacau. In the next 12 months alone,six more megaresorts will throwopen their doors.

Including Wynn, they representan additional 5,777 hotel rooms(Macau has 11,792 now), 2,470 gam-ing tables (present total: 1,925) and9,121 slot machines (today: 4,533).Their total investment is HK$45.25billion, about 10 times Macau’s an-nual foreign direct investment orhalf the current size of its economy.

Too much for the market?Not according to Las Vegas

Sands Corp chairman and chiefexecutive Sheldon Adelson, whoseUS$2.3 billion Venetian will openby June next year and who plans tohave spent US$10 billion by 2009constructing a total of 19,000 to20,000 hotel rooms on the CotaiStrip, a stretch of reclaimed land be-tween Macau’s outlying islands ofTaipa and Coloane.

“If you believe that every personwho likes to gamble in all of Chinaor all of Asia has moved within onehour’s travel of Macau, then there’sno more market to get,” Mr Adelson

said in an interview. “Nobody be-lieves that.”

Residents of Las Vegas are ac-customed to cataclysmic shifts intheir skyline. New multibillion-dol-lar resorts break ground almost onan annual basis, adding to the city’spool of 133,186 hotel rooms.

Hotel occupancy ran at 92 percent last year and 38.6 million visi-tors to the city pushed the averagehotel stay on the Las Vegas Strip to3.5 nights per person. Significantly,convention attendees account for33 per cent of occupied rooms onaverage.

Macau, by comparison, received18.7 million visitors last year but ho-tel occupancy was only 71 per centand the average stay was 1.2 nights.

Some people believe that MrWynn, Mr Adelson and companyhave their work cut out for them iftheir goal is to make Macau the mir-ror image of Las Vegas.

“Turning Macau into a multi-night stay destination is virtuallyimpossible,” said Rob Hart, anexecutive director of research atMorgan Stanley.

Mr Hart calculates only one intwo visitors to Macau stays over-night and of those that stay only halfpay for a hotel room. (The rest gen-erally pull all-nighters at the tables

or nap for a few hours at a sauna.)“They can certainly move those

numbers up but never up to Las Ve-gas levels,” he said.

Still, there is little doubt Macaucould use the facelift. Like a lot ofthe hotel rooms in the territory, theold Central Hotel, now a two-starfacility that charges HK$198 pernight, has seen better days. Openedin 1928 just around the corner fromSenado Square, it was the flagshipcasino hotel of the Fu family beforeMr Ho and associates took over andopened the Lisboa.

By the time James Bond creatorIan Fleming paid a visit to Macau in1959, the property was already indecline and rife with prostitutes. Ina story for London’s Sunday Times,he wrote of an earlier era “when thenine-storey-high Central Hotel, thelargest house of gambling and self-indulgence in the world, had beenconstructed by Mr Foo to siphon offthe cream of the pleasure seekers”.

No doubt the new megaresortshope to trigger the kind of boomthat Mr Ho’s Lisboa did. In the dec-ade before the opening of what theSouth China Morning Post des-cribed in 1970 as “the circular build-ing designed in a style considered‘revolutionary’ in Macau”, the city’srevenue from gaming tax had near-ly tripled to 5.6 million patacas. Inthe following decade it increased12-fold to 71.7 million patacas andbetween 1980 and 1990 jumped by afactor of 28 to two billion patacas,according to official statistics.

The main difference today, ofcourse, is that so much of the newinvestment is banking on non-gam-ing sources of revenue. At present73 per cent of all tourist spending in

Macau goes towards gaming, ac-cording to Mr Hart. On the Las Ve-gas Strip, gaming accounts for only41 per cent of visitors’ spending.The rest goes towards hotels, meals,shopping and entertainment.

Last year, Las Vegas took in anaverage US$240 in non-gaming rev-enue per arrival, compared withjust US$22 in Macau. Part of thereason, of course, is that most ofMacau’s new resort hotels, interna-tional restaurants and commercialplazas are still under construction.

“We’re not going to simply repli-cate what is happening in Las Ve-gas,” said Lui Che-woo, the chair-man of Hong Kong-listed casino de-veloper Galaxy EntertainmentGroup.

Galaxy’s HK$2.95 billion flag-ship StarWorld casino resort opensnext month and the company ispricing rooms at less than HK$1,000per night in an effort to cater to awider swathe of middle-class main-land visitors. In addition, all of thehotel’s eight restaurants are Asian.

“Ninety per cent of our visitorsare Chinese,” explained Mr Lui.“Each company has to find its ownway to survive in the market.”

For the moment, all eyes are onWynn. Its opening is the first test ofhow deep visitors are willing to dig

into their pockets for a nice hotelroom and a fancy meal. The largenumber of companies with hugeamounts of their capital tied to Ma-cau megaresorts means no smallnumber of executives and investorsare on the edge of their seats.

Gaming stocks have been skit-tish this year but recently shares inMacau casino operators have beenin a relative holding pattern. Galaxyand Melco International Develop-ment are listed in Hong Kong whereMr Ho’s Sociedade de Jogos de Ma-cau has struggled to launch its ini-tial public offering.

Publishing and Broadcasting Ltdis listed in Australia while Las VegasSands and MGM Mirage trade onthe New York Stock Exchange.Wynn is listed on the Nasdaq. As ofyesterday, none of the six has seenits shares rise or fall more than 10per cent from levels three monthsago.

The next few months “are goingto be pretty volatile one way or theother for all these stocks,” saidGrant Chum, an executive directorof investment research at UBS.“The single biggest near-term driv-er for all these companies will bewhether Wynn’s opening creates asurge in visitations.”

On this point even Mr Adelson,who for decades has traded barbswith Las Vegas rival Mr Wynn,sounded a conciliatory note.

“I don’t want Wall Street to say:‘Your stock is going to go down be-cause Wynn is losing money.’ Idon’t want that, I want him to makemoney,” he said. “Anybody whodoes bad in this community is badfor everybody.”neil.gough@scmp.com

Las Vegas moguls bet on new Macau

Wynn, Adelson and company are changing theface of the enclave in the hope of replicating theirsuccess in the US gaming hub, writes Neil Gough

Stanley Ho Sheldon Adelson Steve Wynn

THE MAIN PLAYERS

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