The first batch of resorts opened by each of the concessionaires laid the foundation for the industry’s incredible success to come.
The first three of Macau’s concessions were awarded on February 8, 2002. One went to Sociedade de Jogos de Macau (SJM), whose parent, STDM, was finishing up a three-month extension of its monopoly term, which had expired on December 31, 2001. The second went to Wynn Resorts (Macao) S.A., which is today owned by Hong Kong-listed Wynn Macau, Ltd, a subsidiary of Nasdaq-listed Wynn Resorts. The third went to Galaxy Casino,
S.A., today owned by Hong Kong-listed Galaxy Entertainment Group.
At the time of the awarding, Galaxy had partnered in its bid with Venetian Macao, S.A., today owned by Hong Kong-listed Sands China Ltd, a subsidiary of NYSE-listed Las Vegas Sands Corp. Later that year, Galaxy and Venetian agreed to split their license, and the executive branch of the Macau government approved the issuing of a sub-concession to the Venetian, which carried all the same legal rights as the concessionaire.
This sub-concession sets the precedent for each of the other concessionaires to issue sub-concessions. This resulted in MGM Grand Paradise (today owned by Hong Kong-listed MGM China) getting a sub-concession from SJM, on April 20, 2005, and Melco PBL Jogos (Macau), S.A. (today owned by Hong Kong-listed Melco Resorts Ltd), getting a sub-concession from Wynn on September 8, 2006.
Galaxy and Sands got off the mark quickly. In May 2004, the city’s first foreign-invested integrated resort opened to great acclaim on the peninsula, a short walk from the Macau Ferry Terminal: Sands Macao. Later that year, Galaxy opened its first property directly opposite its competitor, on the Avenida da Amizade: The Waldo.
These two properties instantly changed the industry landscape. Galaxy’s smaller property was operated together with a third party while its then-flagship property, Star World, was being built further up the street, yet from its first day, it took a sizeable chunk of market share. Sands Macao, meanwhile, was the city’s first resort built to handle large mass-market crowds, which flooded in on opening day, people literally breaking down the doors to get in.
Designed by Paul Steelman architects, Sands Macao was a revolutionary concept, with high ceilings and a huge main gaming floor. It cost just US$265 million to build. Demand was so strong that the property was an instant commercial success: That investment was recovered within a record nine months.
Both resorts gave strong encouragement to their operators to continue to invest in building their much larger, more ambitious projects to come, out in Cotai.
It could be said that they also gave confidence to the other concessionaires, which had designed and started building their own properties along Avenida da Amizade. Wynn Macau raced against the clock to open next, but was narrowly beaten to the finish line by Galaxy, which opened the spectacular StarWorld in September, 2006. Wynn Macau opened the following month.
The properties were very different in style, yet both raised the bar on Macau’s offerings to visitors in a major way. Star World was a 39-storey high-rise, designed by Hong Kong-based Rocco Architects, which offered the concessionaire’s first illustration of its “World Class, Asian Heart” motto. A striking feature of the resort was not only its layered, neon-lit frame, but the height of the beautiful hostesses at the front door, welcoming guests with their hands on their hearts. Hong Kong movie star Tony Leung was the brand ambassador, helping to put not only StarWorld, but all of Macau, on the regional map as a tourist destination.
Wynn Macau was straight out of classic-style Las Vegas. Designed by a team of people led by the founder, Steve Wynn himself, the property offered a level of luxury Macau could not have imagined up to that point. Its shopping arcade brought in some of the world’s most famous brands – Louis Vuitton had its most profitable boutique in the world here – as well as restaurants, a spa, and a 600-room hotel with the largest suites in Macau, if not the region. The “performance lake” out front dazzled crowds on the opening night.
As a result of these openings, Macau’s center of gravity shifted over to the traffic circle at the end of Avenida da Amizade, where Wynn and Star World faced the incumbent operator’s flagship, the Hotel and Casino Lisboa. Two new projects were coming out of the ground nearby that would open in the next year, adding to the critical mass of world-class offerings starting to generate headlines around the world.
Next to open, barely four months after Wynn, would be the Grand Lisboa, in March, 2007. Designed by Hong Kong-based DLN Architects, the building was inspired by the plumes of a carnival dancer’s headdress. Its opening ceremony was an affair to remember, as the big dome at its base was lit up by a performer carried across the night sky by a wire. The 47-floor hotel tower was not yet ready; it opened later that year.
By now, Macau was starting to generate major media attention. And as the critical mass of new properties grew, more visitors came. It became obvious that this would be a supply-led development model for many years to come. Every time a new property opened, the overall pie expanded.
The last two properties to open in this initial phase of Macau’s growth came in quick succession. Melco got its first open a few months later, with the opening in May of Crown Macau (later changed to Altira Macau), while MGM Macau threw open its doors in December.
The Crown Macau’s opening day was unforgettable. Like Star World and Grand Lisboa, it is a vertical property. The 38-floor building was unveiled to guests huddled under a large tent nearby, where they had been entertained by Hong Kong superstar Chow Yun-fat and circus performers from Franco Dragone’s company (which would go on to open the House of Dancing Water at City of Dreams).
MGM Grand Macau was more like its next-door neighbour, Wynn Macau, built on a bigger footprint, which allowed it to have a larger gaming floor spread out at ground level. It, too, brought a unique experience to the market, with an eye-catching exterior and Portuguese-themed interior. Large suites, luxury boutiques (at the adjoining One Central development), a spa, and classy restaurants added to the mix for Macau.
All of this was just a taste, however, of what was to come. Across the bridge, Macau’s next stage of development was going up in Cotai.
(continued in Part 3)