Shaun Rein
Shaun Rein

Macau tries to stay relevant by opening six new multi-billion hotels this year alone. But business analyst Shaun Rein wonders whether that is the right strategy. Bigger is not always better, he tells the South China Morning Post.

The South China Morning Post:

Even by Macau’s extravagant standards, this all sounds wildly over the top, but is it perhaps something that the city’s predominantly mainland Chinese visitors are looking for. Shaun Rein, director of China Market Research Group, has his doubts: “Bigger is no longer always better. I think five or 10 years ago, everybody wanted to go to these over-the-top hotels, but what we’re finding right now is that people are looking for a different experience and more boutique-like hotels that have themes.”

Enter The Parisian Macao. Targeted to open in the second half of this year, the US$2.7 billion French-themed resort will be Sands China’s follow-up to its Italian-themed The Venetian Macao that opened in 2007. This second Sands mega-resort will feature 2,950 guest rooms, a casino, meeting and conference spaces, a 300,000-sq ft retail mall resembling Paris’s Avenue des Champs-Élysées and featuring 130 boutiques and more than 10 restaurants, a rooftop terrace and pool resembling the gardens of Versailles, and a half-size replica of the Eiffel Tower with a viewing platform where guests can get a 360-degree view of Cotai…

Not everyone is as confident that business models that were successful in the past will necessarily suit present trends and tastes in Macau. “You can’t just offer predictable formulas right now. You have to think clearly about what the Chinese consumer wants. I find that the casino operators don’t understand the Chinese very well,” Rein says.

“The new luxury in China is not buying Louis Vuitton anymore. It’s about posting on WeChat Moments where you’ve travelled to. That’s the new luxury status. When we interview people, they [say they] like to go to New Zealand, Botswana, South Africa, France or Japan and share their photos. It’s showing their friends that they’re living the good life. It’s not about throwing down a US$1 million bet in Macau anymore.”…

But going beyond the argument of traditional resort formats versus more innovative designs, will either concept be enough to generate more non-gaming revenue and revive Macau’s flagging fortunes?

“It’s a tough decision for casino operators,” Rein says. “Should they focus more on hotel, food and entertainment revenue, or do you try to capture back the gambling? That’s why it’s a no-win situation for many of these guys, because they’re going over the top spending all this money, but they can’t generate the revenue back because the reality is the market has just changed.”

More in the South China Morning Post.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

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