Bridge funding finalised

After 25 years, approval has finally been given to a bridge linking Macau, Hong Kong and Zhuhai. In a recent agreement, the three governments agreed on financing for any shortfalls between construction costs and investment by the private developer who will build the bridge and have a 50-year right to operate the bridge and collect tolls of US$12.80-19.23. Macau would cover 14.7 percent of any shortfalls, with Hong Kong and Guangdong picking up 50.2 percent 35.1 percent, respectively. Hong Kong Secretary for Transport and Housing Eva Cheng said the ratio followed the cost-to-benefits principle, adding “the three governments would be responsible for the construction and operation of the boundary-crossing facilities and the connecting roads to the bridge within their own territory.

We agreed to share the amount of the subsidy under the cost-to-benefit ratio”, she said. National Development and Reform Commission Deputy Chairman Zhang Xiaoqiang stated Hong Kong would enjoy 64 percent of the economic benefits from the bridge. Cheng refused to say how much the bridge would cost and the amount of subsidies provided by the Government. However, Zhu Yongling, head of the Advance Work Co-ordination Group’s project office said the main body of the bridge was expected to cost between US$3.9-5.2 billion, plus another US$3.9 billion on infrastructure such as connecting roads and border checkpoints between the three. However, Guangdong Governor Huang Huahua later said the bridge would cost US$6 billion to build and a developer would need 36.5 years to recoup their investment. Guangdong Development and Reform Commission Deputy Director Li Miaojuan recently stated the tendering process was unlikely to happen this year, the South China Morning Post reported.

Single digit hikes

The median wage of full-time gambling sector employees was US$1,868 as of last December, a two percent increase over 2006, according to the Statistics and Census Service. Average industry earnings rose slightly higher (aside from bonuses and allowances) with full-time gaming employees seeing a 6.6 percent wage increase in 2007 compared to the prior year, local daily newspapers reported.

Government to “re-adjust” the gaming industry

Chief Executive Edmund Ho recently said in Beijing that the Government will “re-adjust” the tourism sector, especially the gaming sector, with the aim of fostering ‘sustainable development’ for the territory While in Beijing, between definitions of politics and the ‘improvement of regulations’, Chief Executive Edmund Ho recently defended his administration’s “re-adjustment” of the tourism sector, especially gaming, but also stressed the need “to intensify cooperation with Guangdong province so that the territory can step forward towards ‘sustainable growth’ based on a diversified economy”. When reminded, through a memo of the Government Information Bureau, that Macau is nearing the ninth anniversary of its return to mainland Chinese sovereignty, Ho said “it is not only a necessary long-term plan, but this plan must be constantly revised to solidify the basis of development and to diversify – in an accelerated and appropriate way – Macau’s economy”. On the local political agenda, Ho also recommended “more cooperation” between Hong Kong, Macau and Guangdong “seeking new horizons for the appropriate diversification of the local economy”. Macau’s leader went to Beijing for the closing of the National Popular Assembly, having been received by President Hu Jintao. At the end of the event, he pointed out that the head of state “is well informed of the territory’s development” and manifested the wish for the Government and population to take advantage of “the good period of economic development”. The tourism industry – mainly the gaming sector – that Ho insists he intends “to re-adjust”, is the main gear of Macau’s economy and the major source of the territory’s revenues.

Macau mesmerises Marriott

Luxury hotel group Marriott International recently purchased 30 luxury flats at a top-end residential project in Taipa, overlooking the Cotai Strip, with plans to develop timeshare vacation residences. According to the South China Morning Post, Marriott Vacation Club International acquired five floors at the 50-storey, 196-unit Buckingham, within walking distance of Cotai. “It is the first time for a hotel chain to buy flats [in Macau] and rent them out to club members as short-term holiday homes”, said Jeff Wong, head of residential sales at Jones Lang LaSalle. Wong said the developer aimed to pre-sell units at an indicative price of US$769 per square foot – against luxury residential transaction prices of US$750-1,000 per square foot.

Money for nothing, chips for free

A 34-year-old Hong Kong electrical worker employed as a technician in a central Macau casino was arrested on suspicion of cutting open a cash-conveying duct and stealing US$ 8,974. The suspect, surnamed Wan, exchanged the funds for casino chips – gambling away US$7,741 on table games, according to local police. Wan later returned to Hong Kong but was apprehended at the ferry terminal while returning to work. His case has been transferred to the public prosecutors’ office, the South China Morning Post reported.

Galaxy downgraded

Standard & Poor’s (S&P’s) Ratings Services recently cut its outlook on Galaxy to stable from positive based on greater local gaming competition – both in the VIP and mass markets. S&P affirmed Galaxy’s long-term corporate credit rating and the issue rating on Galaxy’s senior unsecured notes at ‘B’. S&P stated competition among Macau’s gambling operators – who currently own a total of 29 casinos – will rapidly increase. S&P believes Galaxy is responding properly to more competition by upgrading its resort designs and hastening its previously delayed Galaxy Cotai Mega Resort development plans (purportedly until May 2009), thereby raising development costs. “We believe a positive outlook is no longer appropriate for the rating, given the significance of Galaxy’s work-in-progress, heightened competition and rapidly changing market conditions”, S&P stated.

Luck be a lady

A 20-year-old mainland woman from Chongqing recently won a jackpot approaching US$ 474,000 at SJM’s Grand Lisboa while playing ‘Caribbean Stud Poker’. Said Tim Gilbert, the hotel-casino’s vice president for table games: “We congratulate the first lucky ‘Caribbean Stud Poker’ jackpot winner at Grand Lisboa for 2008″.

Olympic dreams

SJM’s Grand Lisboa is offering customers a shot at watching this summer’s Beijing Olympics – in person. Per the “Beijing Olympic Dream” lucky draw, each Saturday between now and 3 May 2008, three winners will be selected and each will receive two Olympic Games tickets and HK$ 5,000 (US$ 641). The final draw on 3 May will see even larger prizes handed out: The first prize will be two Olympic Games tickets and US$13,000 in cash. Second and third place winners will also receive two tickets each and prizes of US$3,900 and US$1,300 respectively.

New Mexico in its veins

When Melco-PBL’s US$ 2.11 billion City of Dreams (COD) hotel and casino project opens later this year, it will have a US company to thank for its clean water. According to Business Week, Albuquerque-based MIOX Corp. will install eight industrial water purifiers to treat everything from pools, spas and drinking water. “Macau is the ‘Monte Carlo of Asia’. The contractors chose us over all competitors… It’s a very visible, high-scale project that reflects the headway we’re making in Asian markets”, said MIOX CEO Carlos Perea. The company will open a regional office in Hong Kong.

Macau raises all

Shares of casino operators recently gained as Macau continued to establish itself as a dominant market. Citi Investment Research analyst Anil Daswani concluded that Macau’s gaming revenue is now twice that of the Las Vegas Strip, which reported January gaming revenues of US$ 597 million, largely owing to Macau’s strong VIP market, The Associated Press reported.

Visitors keep coming

Macau registered over 4.7 million visitor arrivals in the first two months of the year, up 13.9 percent over the same period in 2007, according to the Statistics and Census Service (DSEC). Visitor arrivals reached more than 2.4 million this past February: An increase of 11.6 percent compared to the previous month. Most visitors were mainlanders and Hong Kongers – accounting for 57.7 percent and 28.4 percent of arrivals, respectively. For Easter, the SAR logged above 400,000 visitor arrivals: A year-on-year increase of 11.16 percent, according to the Immigration Department. Over 1.4 million people – including local residents – entered and exited Macau during the holidays via the city’s seven border check points. The city also saw 388,796 visitor arrivals in package tours this past January, a year-on-year rise of 22.8 percent. Mainland Chinese (282,506), Hong Kong (22,604) and Taiwanese visitors (18,079) recorded growth of 21.4 percent, 13.2 percent and 5.8 percent, respectively, compared to the same period in 2007. 33,057 local residents traveled under individual arrangements through travel agencies – up 40 percent from the prior year. Hong Kong (54.5 percent), the mainland (23.7 percent) and Taiwan (6.3 percent) were their prime destinations, according to DSEC.

Venetian beautyfest

Effective September, The Venetian Macao will start setting the stage for beauty pageants. Hong Kong-listed media firm Sun Innovation Holdings recent announced a US$15 million, five-year deal to host the annual Miss International Pageant in Macau come November. The event is supported by a unit of Japan’s foreign ministry and is called a “festival of beauty” and the world’s third-largest beauty pageant after Miss Universe and Miss World. Sun will also revive the annual Miss Macau Pageant, to be held at The Sands in September and co-sponsored by the Macau Government Tourism Office, Hong Kong’s TVB and local broadcaster TDM.

Land arrivals predominate

Government transportation statistics indicate that most of Macau’s visitors primarily use land transport, which rose 16.8 percent year-on-year to above 2.9 million this past February, while those by sea and air were over 1.5 million and 260,000, respectively, according to the Statistics and Census Service.

No guests at Sofitel

As of press time, Inner-Harbour resort Ponte 16′s hotel Sofitel still can’t accept guests, despite opening two months earlier – it lacks an operating license from the Macau Government Tourism Office (MGTO) and is unable to say when one might be issued. The 423-room and 350 employee Sofitel Macau, managed by hospitality specialist Accor, displayed a notice in its main lobby stating it was “not open to the public”. The license has been delayed by the MGTO pending authorisation by the Lands, Public Works and Transport Bureau (DSSOPT) on the resort’s structure, according to Ponte 16′s Senior Vice President of Marketing and Operations Simon Leung.

Thanks to Macau Business

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