Stanley Ho buys into Star Cruises
Stanley Ho is reported to be forming an alliance with Star Cruises, the fast-expanding cruise and gaming company controlled by Malaysia’s Genting Group. He will be invited to buy up to 10 per cent of Singapore-listed Star Cruises, for which he will give rights to build and operate a casino in Macau, according to the Straits Times. Financial executives said the deal is part of a plan by Star Cruises and Genting International to raise funds for the tender which the two companies won last month to develop the Sentosa integrated resort. Star Cruises is reportedly negotiating to secure a sublicence from Ho to build and operate a casino in Macau. He will enjoy royalties from the yet-to-be-built casino, which is expected to be completed in two years, ahead of the Sentosa IR, the report said.

HK$4.7 billion in hotel-casino for Star Cruises
Star Cruises, the world’s third largest cruise operator, recently announced plans to invest around HK$4.7 billion to build a hotel-casino here. The company will invest in Macau through a financial operation involving the acquisition of shares in another company by one of its subsidiaries.
Star Cruises owns 75 percent of New Orisol Investments, which has bought 75 percent of MacauLand Investment Corporation’s capital. The project, “Resorts World Macau,” is to be constructed on land MacauLand owns near Nam Van Lakes. The new project still lacks final official approval. Star Cruises, which owns and operates 21 ships, and will take delivery of four more by 2010, is part of the Genting Group, which owns Genting International, owner of 75 percent of New Orisol Investments. It was recently reported that a selling and buying contract has been initiated between Star Cruises and a group of companies controlled by Stanley Ho.

Credit for MGM
MGM Mirage has received $700 million in project financing from a group of major banks for the MGM Grand Macau. Lenders who have committed to funding the project include Bank of America Corp., Hongkong & Shanghai Banking Corp., Banco Nacional Ultramarino in Macau, Bank of China, Royal Bank of Scotland Group PLC and Sumitomo Mitsui Banking Corp.  The MGM Grand Macau is equally owned and will be jointly operated by MGM Mirage and Pansy Ho Chiu-king, a managing director of Hong Kong-based conglomerate Shun Tak Holdings Ltd. The total cost of the project, expected to open late this year, is budgeted at US$1.06 billion.

Wynn expansion opening delayed
Wynn Resorts will delay opening a planned expansion of its US$1.2 billion Macau casino resort until the third quarter to allow more time for planning. It originally planned to open the second-phase development, which will add about 135,000 square feet of casino floor space, two restaurants, shops and a theatre  in stages from next month.

Money Talks
The local gaming industry, including revenues from horse and dog races and also sports betting, reaped MOP55.9 billion (US$6.95 billion) in revenue in 2006, according to the gaming regulator’s official website, as billionaires Sheldon Adelson and Steve Wynn helped build seven new casinos in the period and doubled the amount of gaming tables. Casino revenues alone reached MOP55 billion, the exact amount announced by Macau Business in our January issue. The Gaming Inspection and Coordination Bureau website reported that fourth quarter revenue rose to MOP16.6 billion, compared to the MOP11.6 billion reported for the same quarter in 2005, according to the site. By the end of 2006, Macau had a total of 24 casinos operating 2,762 gaming tables. The State of Nevada’s Gaming Control Board, which regulates the Las Vegas gambling industry, has yet to release figures for the entire year.

Branson bets US$3 billion on Macau
Sir Richard Branson’s Virgin Group is set to close a deal on a 20-hectare site in Macau for a US$3 billion casino complex, international media report. Branson was quoted as saying; “We hope to get all the boxes ticked in the next couple of months and start developing the site soon afterwards,”
Virgin sources said Branson met with Chief Executive Edmund Ho on Wednesday for talks to confirm plans for an entertainment complex comprising three hotels and a casino, which could open as early as 2010. The development’s US$3 billion cost would be funded “at least partially with a mix of Virgin equity and debt financing from international banks,” and Branson expects to recoup his upfront costs within 18 months of opening, reports said. He is likely to seek a joint venture with one of Macau’s six gaming concessionaires.

Ponte 16 aims high
Casino developer and cruise ship operator Macau Success is targeting daily net winnings of HK$170,000 per gaming table from the 24 self-managed VIP tables at its HK$2.4 billion Ponte 16 casino hotel complex, well above the industry average.The day after the company announced a 51 per cent jump in net profit last year, Executive director Marco Lee Siu-cheung, said he expected each of the main gaming hall’s 150 mass-market tables to average a daily net win of HK$33,000 when it opens in June, reported the South China Morning Post. The ambitious figures compare to the territory-wide combined VIP and mass-market gaming average win of approximately HK$58,500 per table per day at the end of the third quarter. Ponte 16 is a joint-venture project 51 per cent held by Macau Stanley Ho Sociedade de Jogos de Macau (SJM), with Macau Success taking up the rest.

New executive for Melco PBL
Melco PBL Entertainment announced that Garry Saunders, 55, has recently been appointed Executive Vice President and Chief Operating Officer of Melco PBL Entertainment.
Prior to joining Melco PBL Entertainment, Saunders served as Vice President of International Operations at Las Vegas Sands, Inc., with principal responsibility for its Macau operations. This role included overseeing the operations of Sands Macau and the pre-development activities of certain properties on the Cotai Strip in Macau. Previously, Mr. Saunders served ITT Corporation as Executive Vice President for the gaming activities in both its Sheraton and Caesars World Divisions, and Playboy Enterprises as the President of its Gaming Division. Saunders is currently a member of the board of directors of Shuffle Master, Inc., a Nasdaq-listed international casino gaming supply company.

It’s legal: court
The legitimacy of the shareholders’ meeting that approved the HK$15 billion listing of Stanley Ho’s SJM’s spin-off, has been confirmed by a Macau court after a challenge by Mr Ho’s estranged sister, Winnie Ho, who holds 7.3 per cent of SJM’s parent STDM. The challenge came after one of Ms Ho’s two representatives at the September meeting was refused entry because STDM claimed his attendance request came too late. She claimed the meeting was not legal because STDM’s shareholders’ registry, lost in 2002, had not been rebuilt.

Packer’s Macau venture raises US$205 million
The gaming joint venture between Publishing and Broadcasting Ltd and Melco International Development Ltd has raised US$160 million through an offer of shares to the underwriters of its initial public offering. Melco PBL Entertainment (Macau) announced last month that the underwriters have exercised the over-allotment option of about 9 million American depository shares (ADSs) at the IPO price of US$19.00 each.  Melco PBL Entertainment listed on the Nasdaq on December 19 after raising about US$1.065 in its IPO. Funds raised in the IPO are being used to pay for the three casinos the joint venture is currently developing in Macau, including the Crown Macau, which is targeted to open in the second quarter of 2007, the City of Dreams, the first phase of which is targeted to open in late 2008, and a third casino development project planned for a 2009 opening. PBL announced a US$5.5 billion private equity deal in October with CVC Asia Pacific, transferring the group’s media assets to a new company, PBL Media, which will be be half-owned by PBL and the private equity firm.

Underground casino bust
According to local media, the Public Prosecutor’s Office charged 11 suspects with involvement in the operation of a clandestine casino last month.  Police nabbed 10 mainlanders and one local suspected of running a casino in a local hotel suite, where one victim was reportedly swindled out of HK$4 million within an hour of entering. The gang later threatened the victim’s family over the gaming debt. The suspects, if convicted, will face prison terms of up to 12 years, according to judicial sources.

Prices rose 5.15 percent
According to the Statistics and Census Bureau, Macau’s inflation rate stood at 5.15 percent in 2006, a 1.1 percent increase over 2005. The raise was attributed to higher residential and fuel prices (+11.75 percent), education prices (+8.15 percent) and food and non-alcoholic beverages prices (+3.71 percent). In December 2006 alone, when compared to the previous month of November, the price index rose 0.61 percent, owing to rises in clothing and shoes (+1.57 percent), recreation and culture (+1.12 percent), residence and fuels (+0.92 percent), transportation (0,75 percent) and food and non-alcoholic beverages (0.59 percent).  The inflation rate was 1 percent in 2004.

Cheaper energy
Macau Electricity Company (CEM) has announced that the average price for energy will be reduced by 10 percent. According to a press release from the energy production and distribution exclusive concessionary, the price reduction is due to, “new operating conditions, with added imports from mainland China, as well as an agreed reduction of the allowed revenue, higher demand and CEM’s continuous efficiency improvements”. The decrease will be made through a 35 percent discount on the fuel adjustment clause, from 36 avos (1 pataca=100 avos) per kilowatt to 23 avos per kilowatt.
The energy base tariff will remain at around 96 avos per kilowatt.

More water, please
Macau Water executive director Franklin Willemyns, in a statement to Lusa, said that a HK$152 million investment project will will allow 120,000 cubic meters of water to be treated from the Porto Exterior reservoir daily, or  double the previous water-treatment capacity. Macau Water currently provides 260,000 cubic meters of water to the city every day, a capacity that will have to be increased to 300,000 cubic meters by 2010.

HK firms to build logistics center
The government has invited two Hong Kong-based firms to construct and operate the territory’s biggest logistics center, according to the South China Morning Post. The 28,000 square- meter center will be built by Kerry Logistics and Dah Chong near Macau’s airport and the project will be concluded in 2009.

More illegal busted in 2006
The Macau Public Security Police and the Labor Affairs Department are getting more efficient every year. Although they carried out only 994 raids last year, that is, 414 fewer than they did in 2005, in 1,115 places, or 391 fewer places, they apprehended 790 illegal workers. That’s 48 percent more than the 535 found working here without proper documentation the previous year.
It could be it was because they cast their nets wider.  Last year they checked the documents of 24,118 workers, a lot more than the 8,314 more than in 2005. So it would seem they’ve been working just as hard as ever. On the other hand, off the 790 illegal workers they busted, only 342 were sent to the Public Prosecutor’s Office, and that was 105 fewer than went there in 2005.

Turning up the gas
The government of Macau signed a contract with power management company Sinosky to import and transport of natural gas, according to a public announcement in the SAR’s Official Bulletin in January.
The 15-year contract, expected to take effect in October, requires Sinosky to invest around US$1 billion on infrastructures for supplying natural gas to Macau and also build a Power, Science and Technology Museum in Macau. During the contract’s first phase supply will come from Hengqin island. In 2009 when the second stage comes into effect, Liquid Natural Gas (LNG) will be imported via a terminal to be built on the island of Huang Mao, near Zhuhai. Sinosky is a consortium made up of the China Petroleum and Chemical Corporation and Companhia de Gas Natural de Macau, Limitada (Sinopec/G07s Natural de Macau), which in July 2006 was awarded the tender, launched by the government at the end of 2005, to import natural gas.

Malaysia corp to buy Guang Di Macau Construction
Sunway Holdings Inc Bhd said its wholly-owned subsidiary Sunway Global Ltd has entered into a joint venture agreement with Chinese national Yu De Mao to acquire Guang Di Macau Construction Engineering Company Ltd (GDMCE) for 18,000 patacas. In a statement to Bursa Malaysia, the company said GDMCE will be renamed Sunway GD Foundation Engineering Co Ltd upon execution of the joint venture agreement. The company said that the purpose of the proposed joint venture is to submit tenders for all foundation and construction works and if awarded, to participate and execute such works in Macau and China jointly.

Capital Estate buys into Macau project
Hong Kong-listed Capital Estate Ltd said its wholly-owned unit Tumulus Ltd has entered into a preliminary agreement to buy for a 45 percent stake in Fulvid Investment Co Ltd for HK$330 million.  Fulvid owns a 23-story office/commercial project in Macau as its principal asset. Capital Estate executive chairman Stephen Chu said the transaction “allows the group to secure a window to acquire an attractive investment in Macau.” He said the company has been provided with a preliminary independent valuation of the property by property consultants Savills (Macau) Ltd, which valued the project at about HK$ 2.0 billion, following completion of a proposed renovation of the property.

Edmund Ho to tackle employment issue
Chief Executive Edmund Ho vowed to solve employment problems in an address the Macau Federation of Trade Unions on January 25. He said the economic boom has helped improve the employment situation here, but that the government needs to work out policies to ensure permanent residents have preference in seeking jobs, according to Xinhua. The chief executive also promised to set up “proper” legal schemes to crack down on illegal hiring of imported laborers. The Macau Federation of Trade Unions, grouping six major local trade unions, held the reception to mark its 57th founding anniversary.

CCB to open new branches
China Construction Bank Corp, China’s third-largest lender by assets, said it plans to open 14 branches in Hong Kong and Macau in the next three years as it seeks to develop its retail franchise outside mainland China. The additional branches will almost double its current network of 17 branches in Hong Kong and Macau, which it acquired from Bank of America Corp. last year for HK$9.71 billion. The Chinese lender, which had CNY5.17 trillion in assets as of end-June last year, said it was prepared to finance the expansion of China Construction Bank (Asia) Corp., by which the Hong Kong and Macau retail business is known. The bank said it also plans to hire 300 people, which would increase its ranks at CCB Asia to more than 1,000.

Catching up with HK
Macau’s total visitor arrival figures are fast catching up with those of Hong Kong.  Some 21.9 million visitors came here last year, a 17 per cent increase on 2005, while Hong Kong reported 25.2 million, for an 8 per cent increase that fell short of tourism authorities’ 27 million target. The Mainland was again Macau’s biggest source market, with 11.9 million mainland residents arriving last year, up 14 per cent on 2005. Hong Kong is still in second place as a source market, with 6.9 million, up 23 per cent on 2005. Visitors from Taiwan, the third largest market, fell by 3 per cent, to 1.4 million. The 3,000-room Venetian Macao, scheduled to open mid-year, and the Grand Lisboa, expected to open later, are expected to draw even more visitors this year. According to MGTO director Joao Manuel Costa Antunes, new conference and exhibition facilities will boost the city’s tourism sector even more.

Hotel business booming
Macau recorded 387,940 hotel guests in November, a year-on-year increase of 10.2 percent, according to figures from the Statistics and Census Service, which also showed that average hotel occupancy in the month stood almost flat at 82.6 percent over the same period of 2004. The highest occupancy rate was logged in three-star hotels at 90.7 percent. Most hotel guests came from the Mainland (62.0 percent), Hong Kong (21.9 percent) and Taiwan (2.8 percent). The number of hotel guests in the first 11 month of 2005 stood at 3.7 million, 3.5 percent more than the same period last year.

Tiger Airways passengers stranded
Last month budget carrier Tiger Airways was denied a new permit to fly the Singapore-Macau-Clark route because its marketing strategy violated Civil Aeronautics Board (CAB) rules, according to Business World. The board’s executive director Tomas Manalac said the regulator decided against renewing the provisional authority of Tiger Airways for the Singapore-Macau-Clark route because the airline presold tickets for the destinations even before applying for a permit for the route before the board. This, he said, violated CAB’s rules.
Tiger Airways’ provisional authority to fly the Singapore-Macau-Clark route expired on Dec. 29. CAB, however, decided to extend the permit to accommodate the passengers who have already booked tickets for the flight. When the original extension for the permit expired, the firm was forced to halt operations, stranding passengers bound for Macau from Clark at the Diosdado Macapagal International Airport. Transportation department extended the expired provisional authority for several days to allow Tiger Airways to service remaining passengers who already bought tickets. Tiger Airways declined to comment on the matter, saying only the Macau flights have resumed and are “back to normal.”

Air Macau adds 52 flights for New Year
Air Macau plans to operate 52 extra flights for the upcoming Chinese lunar new year, according to local media reports. Airline sources were quoted as saying that the extra flights in the period between Jan. 24 and Feb. 3 will cover foreign and domestic tourism destinations including Seoul, Beijing, Taipei, Shanghai, Shenzhen and Guilin. The airline will also resume the operation to Bangkok. Air Macau logged a record operating revenue of 2.4 billion patacas (US$300 million) for 2005, when it handled 2.1 million passengers and 150,000 tons of cargo, serving 18 destinations across Asia.

AirAsia to launch KK flights
AirAsia said it is launching a new route connecting Macau with the tourist destination of Kota Kinabalu on Borneo island, and another new flight connecting the northern Malaysian city of Penang with Kota Kinabalu and Kuching, in time for Chinese New Year.  The budget carrier operates more than 100 domestic and international flights to Cambodia, China, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Hotels rates go up
Hotels and hostels room rates increased 19.9 percent between the fourth quarter of 2005 and the same period in 2006. According to the Tourism Prices Index for the fourth quarter of 2006, prices on average increased 9.7 percent compared with the previous year, while diverse goods increased 22.23 percent, lodging is up 19.9 percent, and clothing and shoes are up 7.03 percent. During last year’s third quarter, accommodation increased 28.98 percent due to the PRC’s National Day commemorative ceremonies, a date which is celebrated on October 1 and coincides with a popular holiday period. Besides the public holidays, the Grand Prix and Christmas holidays also contributed to the price increase. Currently, Macau has 83 hotels with about 13,000 thousand rooms. By the end of 2008, 17 new hotels will add another 11,850 rooms. Five other hotels will be enlarged to raise the total by another 1,381 rooms.  Forty-one more hotels are expected to be completed by 2010, for a total of 27,000 thousand.

More Mainland travelers
The number of outbound travelers from the Mainland reached a record 34.52 million last year, an 11 percent increase over the previous year, with Macau second only to Hong Kong in popularity, according to a China Daily report. About 9.84 million travelers, or 29 percent of the total, were tourists, according to a report from the Ministry of Public Security. Business travelers and people visiting relatives and friends also accounted for a large part of the total.
The top 10 destinations included Thailand, the Republic of Korea, Russia, the United States, Singapore, Vietnam and Malaysia.The report also showed that China welcomed some 22.21 million travelers from foreign countries last year, up 9.65 percent from the previous year, and among those, more than 11.33 million, or 51 percent, were tourists. Top source countries for travelers to the mainland were the Republic of Korea, Japan, Russia, the United States, Malaysia, Singapore, Mongolia, Thailand, Britain and Australia.

SeaAir eyes Macau flights
Philippines-based Southeast Asian Airlines is planning to launch flights to Macau towards the end of February using Airbus 320 aircraft from Diosdado Macapagal International Airport in Pampanga.
“We have concluded the lease contract for the two A320 last Monday,” SeaAir President Avelino L. Zapanta disclosed following the signing of a contract agreement between SeaAir and Tiger Airways in late January for the long-term lease of two A320s that would be used for SeaAir’s international operations, including new routes to Macau and Singapore.

Pushing the limit at the airport
Macau International Airport handled nearly 5 million passengers in 2006 and is rapidly approaching the annual limit of 6 million travelers it was designed for over a decade ago, officials said. Statistics from the  Airport Administration Authority show that 4.97 million passengers used the airport last year, a 17 percent increase over 2005. Total landings and takeoffs at Macau in 2006 rose 13 percent to 51,047, the official statistics also show.

Heli Express wins 18-year lease
Heli Express, sole operator of Hong Kong- Macau helicopter services, said it has been awarded a tender by the government for an 18-year lease of the helipad at the Hong Kong- Macau Ferry Terminal, as well as the construction of another pad. Chairman Stanley Ho said he was thrilled Heli Express had won the contract over bids from Las Vegas casino mogul Steve Wynn and a joint venture between Sky Asian and legislator Albert Cheng King-hon, adding, “We will continue the existing expansion plan to construct and operate new facilities at the terminal, as well as expand our helicopter fleet to tap the Hong Kong- Macau and Pearl River Delta helicopter service business.”
The pad is expected to be constructed this year at a cost of between HK$60 million and HK$70 million.

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