Macau Hotel Room Supply Expected to Increase Nearly 40 Percent

Posted on: March 15, 2017, 05:00h. 

Last updated on: March 15, 2017, 03:33h.

The number of Macau hotel rooms available for occupancy is expected to increase by 39 percent over the next several years.

That’s according to a new report from the local government in the Special Administrative Region that cites ongoing construction of 17 hotel projects, plus an additional 32 properties in development.

Macau hotel room Lisboa Palace
SMJ Holdings CEO Ambrose So (right) and billionaire Angela Leong, wife of Stanley Ho, discuss the 2,000-room Lisboa Palace in 2014. The multibillion-dollar resort is one reason why the number of Macau hotel rooms will more than triple in the coming years. (Image: South China Morning Post)

GGRAsia, an online media outlet that covers all things gambling in Asia, reports that the city presently has 36,300 hotel rooms. That number will climb to roughly 50,450 should all the planned developments come to fruition.

For reference, Las Vegas has over 167,000 hotel rooms. Orlando, home to Disney World, is second in the US with nearly 122,000 rooms.

Unlike Vegas, Macau hasn’t yet transformed its city into a destination for large-scale conferences and conventions. The Chinese gambling zone has remained a gambling-first region, but casino operators and resort companies there are trying to change that fact.

Grand Openings

The vast majority of the incoming rooms will be on the Cotai Strip, the up and coming area nicknamed by Las Vegas Sands to describe the reclamation land south of the main downtown city.

SJM Holdings, the company founded by billionaire Stanley Ho who had a monopoly on Macau gaming for 40 years, expects to complete its newest property, Lisboa Palace, in 2018. The more than $4.5 billion resort will feature around 2,000 rooms.

MGM Cotai is also nearing completion. The Vegas-based company’s second resort in Macau will come with 1,500 rooms and is slated to welcome visitors this fall.

Melco Crown, controlled by Ho’s son Lawrence, is in the process of developing 780 additional guest rooms at its City of Dreams complex.

The expanding number of rooms in the city has led to a decrease in average nightly rates, and that’s a good thing for hotels that are trying to move away from the VIP visitor towards the mass market. As China has cracked down on junket companies bringing mainlanders to the special territory, casinos have looked to offset high roller losses by bringing more middle-class travelers to their resorts.

Economic Outlook Bright

The forecasts on Macau’s economy are shining as bright as the lights illuminating from the casinos. No longer primarily focused on VIP tables, resorts are offering fine dining, amusement rides, and attractions such as the Parisian’s half-size replica of the Eiffel Tower.

Developers are continuing to invest in Macau despite more than two year’s of falling gaming numbers. After 26 months of casino revenue declines, the trend reversed in August 2016.

February generated $2.87 billion in gambling, Macau’s highest number in seven months and a nearly 18 percent year-over-year increase.

“I think the downturn is well and truly behind us,” Asian Gaming Magazine CEO Andrew Scott opined recently. “That storm, it was unexpected, but we’re through that.”

The Economist Intelligence Unit, a research and analysis group that issues forecasts on countries, expects the Macau economy to grow 5.3 percent in 2017 and 2018. The London-based firm cites the Cotai hotel room expansion in its report.