Macau: Over The Top For Low-Rollers by Patricia Huang, Matthews Asia

We just can’t help but glean insights for our readers, even while on vacation. Earlier this year while on holiday with family in Hong Kong, we were lured by some great resort specials to do a side trip to neighboring Macau. For just US$150 a night, we scored five-star luxury accommodations on the Cotai Strip, famed for its palatial casinos. But we were hardly there to gamble. In fact, the sum total of our gambling experience during our three-day stay can be described by a single, brief and fruitless encounter with a slot machine while en route to a spa treatment.

But it didn’t matter. We were thrilled with our hotel’s impeccable customer service. During check in, we were offered a late check out time of 3 p.m. while a bell hop played with my six-year-old and gave her a welcome gift bag. Then both he and the night manager personally escorted us to our room. During a swim the next day, when I happened to wonder aloud whether rain was approaching, a poolside attendant offered up the week’s full weather forecast. Other attendants were practically ready to wrap us in plush towels as we exited the water.

Was this VIP treatment merely standard Macau hospitality? Or were we the lucky beneficiaries of Macau’s gaming downturn? We had to wonder. Glitzy Macau, we were also happy to discover, has become surprisingly family friendly. By design, it is rolling out more and more non-gambling attractions to broaden its appeal. On our “to do” wish list was “Breakfast with Shrek,” (the DreamWorks Animation character), the Broadway musical “Beauty and the Beast” and lunch at one of Macau’s 11 Michelin restaurants (almost double the number of Michelin-rated restaurants there in 2009).

This gambling enclave’s slump began two years ago when China first unveiled its anti-graft campaign, chasing away the once-dominant, high-rolling VIP crowd. By September this year, gross gaming revenue had marked its 16th consecutive monthly drop when it fell by one-third. However, hotel operators have not, as it turns out, taken as much of a hit on rooms since many had previously been given out as comps.

Determined to break its reliance on big spenders, the local entertainment industry has built new and over-the-top attractions—like a colossal golden, figure-eight Ferris wheel—designed as an affordable thrill for the masses of China’s new middle income bracket. It is also now catering to younger tourists seeking more experiential travel options. The region’s new Vegas-esque features include the world’s largest rooftop river ride and outdoor wave pool and the world’s highest commercial bungee jump (at 233 meters). Those wanting to experience a touch of Paris can soon check out a new half-size replica of the Eiffel Tower that will grace Macau’s skyline.

That horizon is still surprisingly crowded with busy construction cranes. During our trip, we counted over a dozen as well as thousands of bamboo poles used (astoundingly) for scaffolding. It seems Macau is almost willfully continuing to build amid this downturn, and forging ahead to diversify its revenue streams—hosting concerts with such global icons as Madonna and galas attended by Hollywood A-listers like Robert De Niro.

Macau has also taken a page from the Vegas book by promoting high-profile boxing bouts in recent years, with world champion Manny Pacquiao playing a central role in building up this new prizefighting capital—and pushing the once-banned sport further into mainland China. Communist Party Chairman Mao Zedong had outlawed professional boxing for decades for its “violent and capitalist characteristics,” and the ban continued until the late 1980s. The sport more recently, however, has seen a resurgence in popularity in China. Newly anticipated policy changes to relax transit visas for mainland travelers to Macau may offer the sport, and Macau tourism overall, a boost. Likewise, in the long run, Macau too may find it has more than a fighting chance at success.

Patricia Huang

Investor Communications Manager

Matthews Asia

Macau