Macau’s economy is growing at 13% annually, with a recent surge of 28% during the first half of 2007. The driving force has been the construction of casino-related projects that resulted from the opening-up of the gaming industry in 2001. Many U.S. investors are actively pursuing casino-hotel projects, including The Sands Corporation, Wynn Resort, and MGM, in addition to large-scale expansion by other local and international firms. Anticipating growth in gaming tourism over the next five to seven years, at least USD10 billion in new projects are planned. These projects present opportunities to U.S. architects, engineers, building products suppliers, gaming equipment suppliers and show organizers.
Macau's economy has remained one of the most open in the world since its reversion to China in 1999. Exports and tourism are mainstays of the economy. Although Macau was hit hard by the 1997-98 Asian financial crisis and the global downturn in 2001, its economy recovered rapidly at 13.1% annually. In the first half of 2007, the GDP of Macao grew by 28%. The GDP per capita in 2006 was USD28,436. In the fourth quarter of 2006, the unemployment rate stood at 3.5%.
A rapid rise in the number of mainland visitors resulting from the easing of China's travel restrictions, increased public works expenditures, and significant investment inflows associated with the liberalization of Macau's gaming industry, has driven the four-year economic recovery since 2002. A hike in taxes on gambling profits, which generated about 70% of government revenue, has pumped new resources into infrastructure.
The casino industry, the backbone of Macau’s economy, was controlled by the Sociedade de Turismo e Diversoes de Macau (STDM) monopoly for the last 39 years. This changed in 2001 when casino licenses were offered to other casino operators. These new operators include Las Vegas Sands, which opened the Sands Macau in 2004 and the Venetian Macau in 2007, the Wynn Macau in 2006 and Galaxy & MGM Casinos in 2007. As a result, total gaming capacity, measured in gaming tables, is planned to grow by about 300% over the next 5 to 8 years.
In 2006, Macau surpassed the Las Vegas Strip in terms of gaming revenue. The city raked in USD6.95 billion in gaming revenue, while the Strip made USD6.69 billion.
In view of the promising prospect of the gaming industry, the Macau Government launched an ambitious infrastructure development project under which a stretch of reclaimed land called Cotai will be developed into a Las Vegas style gaming region. The Cotai Strip represents the "New Macau" and is about one third the size of Macau. With high accessibility, the area has attracted substantial investments from the world's gaming giants.
The first phase of the Cotai Strip was opened in August 2007, which will feature seven resort hotels comprising more than 10,000 guest rooms set in tropical landscapes. It will offer a critical mass of business, leisure and entertainment attractions, including world-class meetings and convention facilities, over 20,000 seats of live entertainment in eight separate theater venues.
From now until 2014, another USD10 billion in projects are planned for Cotai. The construction boom will boost demand for building products, construction equipment, hotel equipment, gaming products, and other MICE (meeting, incentive, convention and exhibition) related products and services.
By Elanna Tam