Wilfred Wong, president of Sands China, clearly likes to talk about the topic of Macau’s economic diversification. He starts the conversation by reeling off some basic statistics.
“Among the six operators, we are the most diversified, in many senses,” he says. “Consider this: We account for 40% of all hotel rooms; 85% of all MICE floor space; 55% of total retail floorspace; 53 of total number of entertainment-venue seating; and 45% of total non-gaming revenue.”
Wong’s concern going forward, however, is not only for Sands China, but for the entire Macau economy.
“If Macau is to develop further, particularly in the area of meetings and conventions, we will need significantly more hotel rooms,” Wong says. “If we are to continue to diversify, rooms are a must.”
Pointing out that most of Macau’s integrated resorts are running at more than 90% room occupancy rates, Wong believes that capacity can be more than doubled in the next 5-10 years. Whether this happens in Macau, or across the border in Hengqin, is up to the government to decide.
The math is simple. “We now have around 40,000 hotel rooms in Macau, which is similar to what Las Vegas had back in the 1980s,” Wong says. “Today, Las Vegas has 150,000 hotel rooms.”
Granted, Wong says, Macau does not have the same landmass or the same supporting industries and services as Las Vegas does. “But is it realistic to expect that Macau could double the number of hotel rooms? I believe so. This would make a big difference to developing the MICE business. At the moment, we are constrained because big conventions need hotel inventory. And because a large percentage of rooms need to be kept open for gaming customers, we sometimes cannot accept big events here. Therefore, adding new rooms – for everyone – would help to diversify the economy.”
Fortunately, Macau has the Greater Bay Area master plan as a guide to the future, which suggests Hengqin can help to support Macau’s non-gaming development. “President Xi Jinping has said many times that Hengqin and Macau must cooperate to grow their businesses together,” Wong adds. “This makes sense and we would like to support Hengqin’s growth.
Visa policy could also be helpful in this regard. “The continuing development of the MICE business has got to be done handin-hand with government policy,” Wong says. “Even though we have been able to grow our business from other countries around Asia and elsewhere in the world, visitors from China are still our primary market. If the Chinese government can continue to take a more relaxed approach to granting visas, that would help to develop the business further.”
Besides the MICE business, Wong sees continuing growth potential in many aspects of the company’s non-gaming business. “All we have done in the non-gaming entertainment space – the Phil Mickelson visit, the Celine Dion concert, the sporting events, the classical music concerts, and so forth – is being done to support the government’s aspirations to become a world center for leisure and tourism,” he says.
The balance between gaming and non-gaming has always been in the company’s DNA, Wong adds. “If you look at the last 15 years, you can see that we clearly kept our promise to Macau to help it diversify. And it is ongoing. The Londoner redevelopment, for instance, will include a new theatre seating 5,500 people. This shows you how we feel about the potential of the non-gaming entertainment market in Macau.”
It is the same in shopping. “Although we already have 850 shops in our malls, demand is still growing,” Wong says. “We see a bright future ahead in retail.”
All of this confidence is underpinned by a long-term approach to development, Wong says. “People keep asking me, ‘Why are you guys so confident?’ If we were to adopt a wait and see attitude, it would mean we would lose three to four years of development. We don’t want to do that, because we have longterm confidence in Macau.”