Despite a 37-percent decline in gaming revenue this year (according to Forbes) and visitor figures for March showing a 13.5-percent year-on-year decline, Macau's hotel industry is forging ahead.
According to Bloomberg, all six of Macau's casino operators are currently in the midst of developing new resorts to the tune of $26.6 billion. The first of the new resorts opened last week, headed by Galaxy Entertainment Group.
"Galaxy's openings will be the first major test for the industry on whether new capacity will drive visitation and gaming revenue recovery," Jamie Zhou, an analyst at Macquarie Securities, told Bloomberg. "The question now is what kind of customers they will bring and how much gaming revenue are they going to drive. That's what on everyone's mind."
Two new hotel opened last week as part of the Galaxy project: the JW Marriott Hotel Macau and The Ritz-Carlton, Macau.
“Marriott International sees unlimited potential in the future of Macau,” said Henry Lee, Greater China Chief Operations Officer for Marriott International. “The launch of JW Marriott Hotel Macau and The Ritz-Carlton, Macau with Galaxy Macau are long-term investments that will perfectly complement Macau’s evolving tourist landscape. The region has undoubtedly changed significantly in recent years and we are seeing the city transform from a gaming destination to one with a more diverse range of entertainment and recreation options for guests of all ages.”
The JW Marriott Hotel Macau has 1,015 rooms and suites and the world’s largest JW Kids’ Club. The Ritz-Carlton, Macau, the first all-suite Ritz property, features more than 250 suites.
Aside from casino resorts, Macau has a large hotel construction pipeline. Macau Business Daily reported that as of Q1 2015, Macau had 18 hotels under construction and 25 undergoing government approval. This adds up to 25,600 new hotel rooms coming into a market that, as of March, had 67 operating hotels.
There is good news on the rate front, however. The RS Hotel Price Radar for the first quarter of 2015 showed that Macau, Sydney and Hong Kong were found to have the highest average hotel room rates, in the Singapore dollar, from January to March. Room rates in Macau leaped 64 percent year-on-year to hit S$269 (US$202).