Macau—First Impression

I’ve just arrived in Macau from Bangkok, and the differences between the two countries hit me as soon as I arrived at my hotel. The first thing you notice when you arrive in Thailand is the sweet smell of jasmine flowers, and the gentle scent of incense coming from the temples. Macau does not smell like jasmine—it smells like money. And as much as I like jasmine, you just can’t go wrong when you land in a country that has the aroma of dollar bills. 

Sure, technically it is part of a Communist country, but you wouldn’t be able to tell it from the flashy casinos and rows of shops selling Rolexes, Gucci handbags and other high-end goods. I’m looking out my hotel window at the fabulously glitzy Lisboa Casino, an architectural wonder that dominates the skyline as a tribute to money, gambling, and everything that’s wonderful about capitalism.

Although I didn’t make it to the casino today, the Mrs. and I did enjoy strolling around Senado square, taking in the sights. After seeing the ruins of St. Pauls, the Macau museum, and the Lou Kau mansion, enjoying some excellent Macanese restaurants, and picking up a box of freshly made Portuguese egg tarts to take back to the hotel with us, I came to the realization that there’s a lot more to do here besides play blackjack—and that Macau’s money machine goes far beyond the casino business.

Macau’s status as a premier destination is still rock-solid. Even as fewer tourists are going to other common vacation destinations, Macau’s visitor tallies for the first quarter were up 17.9 percent against last year’s first quarter. Over four million of these visitors were from China, and the quarter saw 22.6 percent more visitors from the mainland—testimony to China’s rapidly rising middle class, which is anxious to spend its newly-found disposable income.

The biggest news here is the recent move by Macau’s Legislative Assembly last week to freeze further casino licensing. Although it may cause some initial worries, the freeze on new licenses is not likely to put the bite on Macau’s gaming business, which is already larger than that of Las Vegas. In fact, most of the business community, gaming and otherwise, should welcome the news. In fact, since tourism is rising so quickly (and judging from the speed at which my fellow passengers jumped out of the plane and onto the casino shuttles, those tourists want to gamble), the existing casinos will see their share go up precipitously.

But make no mistake, Macau is not a one-trick pony. (Oh yes, looking forward to going to the races this week as well!) Gambling brings in the tourists every day, but not everyone spends their entire visit at the tables. Every now and then, they have to come up for air, go out and eat something and do a little shopping. Or, if you win big at the tables, a lot of shopping. The retail segment in fact, takes a top spot in fueling the Macau money machine. The incredible shopping opportunities here would certainly not exist without the gambling industry acting as a catalyst for retail’s growth, but Macau’s retail engine is huge.

Last year, Las Vegas Sands Corp. opened up a million square feet of shopping space at the Venetian, and plans to open up two million more on its interlocking Cotai Strip plots. Gambling and retail seem to be a good combination of businesses, in Las Vegas for example, between 1995 and 2005, retail almost doubled. And shopping malls in Las Vegas are among the country’s highest earners in the retail business, raking in about three times the amount of sales compared to average shopping malls in the US. And it may not be scientific, but I can see very clearly where Macau’s bread is buttered just by personal experience–while I’m at the gaming tables tomorrow, I know where my wife is going to be, and that’s shopping.