The non-gaming investment requirements for Macau gaming concessionaires are already reshaping the Special Administrative Region, according to industry experts interviewed by AGB.
Macau is betting big on non-gaming elements, particularly after its reopening in 2023. Joji Kokuryo, managing director of industry consultancy Bay City Ventures Ltd., noted that “the most literal examples of this reshaping are the revitalization projects of specific locations within Macau.”
All six gaming operators in Macau have been tasked with revitalizing six different old districts in the city’s bid for diversification. These districts include Lai Chi Vun Shipyard, Rua da Felicidade, the A-Ma area, Inner Harbour Piers 23 and 25, Avenida do Almeida Ribeiro and Rua de Cinco de Outubro, as well as the Iec Long Firecracker Factory.
“In general, the key expectations are the diversification of inbound tourism and revenue streams, as well as further emphasis on social and community relationships,” said Kokuryo.
“For the concessionaires, the race has started to ensure that investments not only achieve visitation goals but also keep in mind non-gaming revenue optimization and bring value to each brand’s marketing strategy.”
Kokuryo further notes, “Diversification of inbound tourists is something every market needs regardless of the existence of gaming, and Macau will look to set the standard for such initiatives that are backed by huge private sector investments.”
“I think that many gaming markets can see how diversification of offerings is important for sustaining a healthy local industry. On the Macau peninsula side, where the hardware side is limited in terms of hosting big events and concerts, the development of the Cotai strip has boosted the capabilities of the concessionaires.”
Regarding the Philippines market, which is poised to surpass Singapore to become Asia’s second-largest gaming hub by 2025, Kokuryo indicates that integrated resorts located in Manila have also been “improving their F&B, retail, and entertainment options”, showing that more developed gaming operators with scalable facilities are already embracing non-gaming attractions.
Few direct impacts from holding concerts on GGR
Although there is a consensus that holding concerts in Macau helps rebrand its image from a gaming hub to a city of entertainment, there are still “few direct impacts from holding concerts on gaming revenue”, according to a gaming scholar.
Zeng Zhonglu, from the Macao Polytechnic University’s Gaming Research Team, notes that the majority of participants in concerts are the younger generation, who have less interest in gambling.
“This group of clients has low spending power compared to the older generation; however, they significantly boost revenue in F&B, retail, and hotel segments.”
“In this context, the government’s efforts in non-gaming have achieved some results, but it is still far from changing the current scenario where Macau continues to rely heavily on gaming revenue,” said Zeng Zhonglu.
Hengqin
Even though the Macau government has issued a strong appeal to take advantage of Hengqin to diversify Macau’s economy, the gaming scholar considers that in the foreseeable future, “I cannot see possibilities that Hengqin can help Macau to increase its economic growth,” citing that Hengqing’s GDP continues to belong to Zhuhai.
“Both the governments of Macau and Guangdong have pushed hard for the joint development of Hengqin, but the region is facing worse opportunities compared to past Shenzhen, so the incentive needs more time to follow,” he said.
The authorities are discussing the possibility of launching a multi-entrance visa for visitors to Macau. Currently, Chinese visitors entering Macau with a 7-day visa can only enter once, and hotel expenses are one of the reasons people have shorter stays.
Many industry experts have suggested in the past that a multi-entrance visa would be an alternative for people to stay longer in Macau, which would also be beneficial for Hengqin’s development.
Many international luxury hotel brands are already in or planning to enter, with groups such as the Hyatt Regency Hotel and Hilton Garden Inn already operating in the city for many years. Some self-branded hotels, such as Serensia Woods Hotel, Chimelong-branded Penguin Hotel, Circus Hotel, and Hengqin Bay Hotel, are also operating in the area.
