Hubert Wang: Macau must avoid repetitive non-gaming investments

Wang was part of a Macau operator’s panel at MGS Summit on Tuesday where representatives of all six concessionaires offered their insights into the current state of the market.

Quizzed about the combined MOP$108.7 billion (US$13.6 billion) Macau’s concessionaires have committed to spend over the 10-year duration of their gaming concessions, Wang said, “I think the investment is affected by the ‘Pareto principle’ where only 20% of the investment will produce 80% of the impact. We are always looking for that 20% in our investments.”

On how concessionaires will distribute their non-gaming spend, Wang added, “Out macro investment is already known and will not decrease, but micro adjustment is necessary to pay attention to the future changes of tourists. I think that Macau’s concessionaires should avoid repetitive investments.

“Some will focus more on concerts and some will focus on the arts, but we should [try to] complement each other’s offerings.”

On the topic of concerts, Sands China President and Executive Director Wilfred Wong said these could play a vital role in driving the city’s economy, even if their direct profitability was minimal.

“Concerts may not be really profitable, but we are driving the economy of the city,” he said. “The concert economy, if we can organize popular concerts, all the concessionaires will benefit.”

However, with the government pushing for concessionaires to utilize their future investments to help grow international tourism, SJM’s Chief Operating Officer – Gaming and Hospitality, Frank McFadden, said it shouldn’t be up to operators alone to shoulder the burden.

Instead, he called for the development of a “visitor experience ecosystem” in order to remove unnecessary impediments to attracting international tourists.

Specifically he pointed to issues such as Macau traffic, the lack of a reliable taxi service and the absence of business class seats on direct Macau flights as key considerations moving forward.

The government in cooperation with academia and industry experts must “identify all of the elements that make up the ecosystem … to create a harmonious and coordinated activity to create an atmosphere conducive to Macau becoming a [tourism hub] … and this still needs a lot of work.”

McFadden also commented on what some have dubbed the “brain drain” from Macau, with many senior foreign executives having departed during the pandemic years.

According to McFadden, bringing back some foreign talent was vital to ensure locals are trained and mentored for the long-term, adding that SJM has already hired a number of foreigners to fill skilled positions.

Wang added, “A lot of MGM’s managers are local people, but local people need to be trained. “As an international tourist city, it’s important for Macau to be open to all sorts of people … any talent that can help Macau should be welcomed.”

Wong said, “93% of Sands China’s management is local but there will always be a need for outside talent, especially now with the increase in non-gaming elements.

“The local talent is all operational, but thinking and vision, this is an area where the local talent needs to be nurtured and trained to become leaders.”