Fortunes on the rise for Macau hotels

Hoteliers are optimistic that new hotel supply will be absorbed by growing visitor demand

Melco Resorts’ Morpheus is a new entrant to Macau’s luxury scene

Despite a new swathe of rooms coming on-stream this year, hoteliers in Macau remain confident that demand will continue to outpace supply and prop up business.
This could be attributed in part to the rebound of visitor arrivals. For 1H2018, Macau’s Statistics and Census Service (DSEC) indicated that visitor arrivals totalled over 2.6 million in June 2018, up 9.4 per cent year-on-year.

Melco Resorts’ Morpheus is a new entrant to Macau’s luxury scene

Overnight visitors in 2017 grew by 7.2 per-cent year-on-year to pass 1.4 million, according to DSEC figures.

Meanwhile, occupancy rates for all hotel types reached 89.8 per cent, an increase of 4.3 per cent. Room rates grew 7.1 per cent from MOP$1,252 (US$154) to MOP$1,342 during the same period.

Occupancy wise, five-star hotels performed well to record a 7.8 per cent uptick, while the three-star category was the only one to have experienced a decline (-2.1 per cent).
Crowne Plaza Macau, for instance, continued seeing high occupancy in 1H2018, and a double-digit growth in average rates.

General manager Dominique Berhouet explained: “Although Macau is questioning the issue of oversupply, (new openings such as) Morpheus and MGM Cotai are targeting the casino market, a different market from what Crowne Plaza Macau (is going after).

According to Macau Government Tourism Office, mainland China is still the top visitor market to Macau, and most of the new rooms have found utilisation with casino goers or junkets.

Moreover, the Hong Kong-Macau-Zhuhai Bridge, which is approaching completion, represents an important new gateway to Macau and “should help to further develop the Hong Kong and Guangdong area market,” said Berhouet.

Sharing similar views, vice president of operations at JW Marriott Hotel and The Ritz-Carlton, Rauf Malik, said both properties have not had to adjust rates despite the new openings as demand for rooms remains high.

“If visitors from these other cities grow two to three per cent each year, then already there won’t be enough rooms to accommodate the influx of visitors,” said Malik.

“We continue to see tremendous demand from China, Hong Kong, South Korea and Japan, all of whom are interested in the newly developed Cotai area. Even with the addition of new hotels, we remain optimistic about occupancy rates,” he added.

Mandarin Oriental, Macau, as the only non-gaming international hotel located on Macau Peninsula, has seen significant increases in its performance indicators since January 2018 compared to 2017.

Director of commercial strategy, David Lam, said the luxury hotel’s target market is different from others located in Cotai, drawing guests seeking pampering experiences and personalised services.

Like Berhouet, Lam expects the soon-to-be-operational Hong Kong-Zhuhai-Macao Bridge to be one of the key developments for Macau’s tourism.

“This is expected to (bring in more) double and multiple-destination tourists arriving at Hong Kong International Airport.”

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