The Lotus Bridge Cotai Frontier Post
As a measure expected to benefit the region’s tourism and gaming industries, the Hengqin border will start operating around the clock this Thursday. Tim Craighead, director of Asian Research for Bloomberg Intelligence, believes the new border policies will contribute to “the longer-term development of non-gaming entertainment businesses for the wider region.”
Mr Craighead spoke at Bloomberg’s Asia 2015 Outlook event last week in Hong Kong, providing his views on Macau’s gaming industry for next year, as well as presenting this year’s market overview.
“The envisioned ‘Orlando of China’ concept depends on an easy and open border between Hengqin and Macau. It will take several years for this to fully develop, and the 24-hour border is another step in the right direction,” he told The Times in an email.
As a once unspoilt island in Southern China, Hengqin is set to become a hub for tourism, and non-gaming entertainment projects are expected to develop there in the coming years.
The Lotus Bridge Cotai Frontier Post (connected to Hengqin) will be operating on a 24-hour basis as of December 18, in addition to the Border Gate’s extended operating hours between 6:00am and 1:00am.
Mr Craighead said that Macau’s integrated resort market “is one of the most leveraged and direct bets on the growth in the Chinese consumer.” As another wave of Cotai resorts takes shape, he believes that Cotai and Hengqin Island are likely to turn from a massive construction site “to a truly world-class destination.”
“The direct connection to the Hong Kong International Airport adds another dimension for the development of a much bigger convention business,” he stressed.
Macau’s gaming revenue dropped for a sixth consecutive month in November, and both the local government and Chinese leaders have pledged to help diversify the city’s economy, asking gaming operators to put an emphasis on the non-gaming sector, particularly in the new integrated resorts.
Mr Craighead said that several points of pressure have driven Macau’s casino revenue drop over the second half of this year. He forecasts that most of these points of pressure “will continue to challenge Macau’s casino business” in the first half of 2015.
“The prospects are brighter for later next year, with the launch of three new resorts, easing year over year growth comparisons and the potential impact from Chinese policy stimulus,” he recalled.
Mr Craighead said that several factors played a role in Macau’s gaming revenue drop, including the lack of new resorts opening this year, as well as China’s anti-graft campaign, a new full smoking ban in casino mass gaming floors, and slowing economic growth. “Year over year comparisons to last year’s extraordinary growth also created a very high hurdle. And the shift in tables to the mass market segment also took casino capacity away from the high-revenue VIP business,” he added.
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