Francisco Coelho, the ‘Dark Knight’ | ‘Macau’s economy will come back better and better’

Francisco Coelho (left) and a party at D2 (right)

Nicknamed the “godfather” of Macau’s nightlife, Francisco Coelho, 56, has been running the hottest clubs in town, namely D2 and DD3, for over two decades. Mr Coelho is confident that the city’s current economic downturn will reverse “in one and a half to two years” with a vengeance. That is why his stance on new investments is “wait and see,” and expanding to casino-land may be an option in “three-four years’ time, when Cotai will be fully-developed as an entertainment center.”
Francisco Coelho runs his business with a thousand staff generating around MOP100 million in gross revenue. He invested MOP30 million in moving the famous D2 to the Fisherman’s Wharf where he also did renovations in the nearby DD3, the branch targeting younger patrons.
The move to the Wharf was, also, aimed at having access to the board-walk and so to accommodate an open-air smoking area – which will open by December or January at the latest.
Broadening his vast interests, the “dark knight” ventured into a lighter form of the “pleasure-­business” by opening ice-cream and chocolate franchises from top brands in Macau: Häagen-Dazs and Godiva, of which he currently has a total of 10 shops. Plans are in place to open another three-four outlets of these yummy franchises in two years’ time.
Going down memory lane, Mr Coelho aims to bring back the 1990s UFO-style Thai bands to D2 “soon enough”. For Coelho, nightlife now “is a safe place.” The interview.

MDT – Does the ongoing decline in gaming revenues affect the nightlife business?
Francisco Coelho (FC) – Yes, business went down after the casinos started to slow down. The VIP clubs have been losing customers. Before that, the PRs from the junkets – even when people [VIPs] win or lose money – anyway, [the PRs] would bring them to the club to entertain them, to get a closer relationship, to accompany and follow their customers – so this was the way the nightlife was booming in Macau. But besides [the gaming crash] there’s another very important factor affecting businesses: since Macau[‘s border] opened up for 24 hours many people are going to China, to Zhuhai to have fun…
MDT – So there’s competition from Zhuhai?
FC – Very strong competition, yes. So before when the border closed at midnight people after midnight […] wouldn’t think of going to China.  Well now, even at dinner time [they go]. The restaurants in Macau are being affected; some restaurants are losing 50%.

MDT – Do you plan any ventures there, in Zhuhai, Hengqin?
FC – Actually, a long time ago people were pushing me to China, but I didn’t feel good about it. I didn’t feel [positive about it] because once you put up a business in China, you need to go [live there], but I don’t feel safe there, you understand?!

MDT – The rules were not that clear?
FC – The rules were always changing. [But] if I’d gone back ten years ago, I’d be there and [would have made] a lot of money, without even staying close to Macau, even in Shanghai.

MDT – So you think that these actions Xi Jinping took against a lavish lifestyle and corruption and “vice” is affecting a lot of Macau businesses, gaming and otherwise?
FC – Of course. Gambling is “the head”.  So when the head is going down all businesses down to the smallest of businesses fall.  Macau now must really take time to wait – I think, at least one and a half to two years to come back.  To come back slowly, not like before. And it will come back, better and better. But after two years or so.

MDT – From what you’re saying, it seems that before with the huge expansion of the casino industry, even with competition, it was better for you in terms of business.
FC – Yes because everywhere you looked – busy, busy, busy. Everybody was making money, not only me.  Everybody. But now, once things turned down, of course, [we watch each other].  [Watching whether] you have customers or not. They also know [if] you have problems. This one has a problem, now everybody has a problem.

MDT – Over the last 15 years or so, the nightlife and the society in general was a very safe place.  Is nightlife still safe in Macau?
FC – Yes. Macau actually is safe, really safe.  Everywhere you go is safe: no problem.

MDT – But with less money, business coming down, do you foresee any dangers in the nightlife sector?
FC – Not for the night business, but I think you’ll see problems where people used to make money in the casino.  That’s now stopped. Then what they do, they will do.

MDT – Are you talking about the junket operations?
FC – Junkets and other casino business.

MDT – Do you foresee the emergence of security troubles such as we saw in the late 1990s?
FC – Not so much, because Macau has also changed.  Macau is within China. Especially now the police and everything involves China.  So it makes [the rule of law] stronger, not like before. It’s difficult to do something [crooked].

MDT – Has the smoking ban, now in place for about two years, affected business too?
FC – In the first year, it affected us a lot. But now it’s getting better day-by-day. People are more educated. It takes a little bit of time to adjust.
MDT – Another business issue for Macau is rental prices. Do you think the rents will go down?
FC – Yes, just a little bit.  Now we are facing an economy going down and maybe the landlords will adjust rents. I think 10% to 15%, something like that.

MDT – Was that one of the reasons you moved from AIA Tower to the Fisherman’s Wharf?
FC – No, AIA has not renewed my rental contract because AIA doesn’t want to have this kind of entertainment in the building.  They want just restaurants and offices and that’s why I moved to the Fisherman’s. And secondly, we moved to the Fisherman’s because we were looking for outdoors areas also.  So I will have [at D2] an outdoor bar. It will be open, I think, by December or January next year.

MDT – Going back to your career in Macau running businesses, you started with the D, the original D at Jai Alai.
FC – I started my first entertainment business at Jai Alai Show Palace, about 23 years ago.
I still have that. That is a table dance bar.

MDT – And the first “D”, the original “D”?
FC – The disco, the first one was UFO. UFO at the Jai Alai, my first club ever. It was about 20 years ago with Thai bands on the stage.  I think I will put that back soon.

MDT – Will it be the same style, the same model?
FC – No. I’m [reviewing that] because Macau is changing. You see, Pacha [at Studio City] opens tomorrow. I’m thinking of changing it a little bit; something like “UFO memory lane” at D2; that will be good.

MDT – When did you move from Jai Alai to Sintra?
FC – Before Sintra, we need to remember [there was] also Fortuna club on the 6th floor. I had two bands at that time, [when] nobody was doing two bands.  One Canadian and one Thai band.  So after the Canadian, there was a 15-minute break, [then on] comes the Thai band.

MDT – This is the 1990s right?
FC – It’s 1990s, yes.  Then, after that, we moved to Sintra’s basement for eight years. There we had the “guei-lo” side and the “big disco” side [smiles].  After Sintra, we moved to AIA Tower, where we stayed for seven years.  We’ve never stopped moving.  In the Fortuna days, the [hotel] boss called me one day and he told me, “I’m sorry, your business brings people like crazy to […] Fortuna. This is good. But, you know, you sell sound and alcohol. I sell rooms for people to sleep.” [laughs]

MDT – You had a clash of interests… The noise.
FC – Yes. He complained, you see [we were on] the sixth floor. So, from the eighth floor there were rooms [all the way] to the top, so every night [guests] would call the resident manager: blah, blah, blah. He’d come to me and complain: blah-blah-blah. This happened for years and when the contract finished – not because business wasn’t good or the rent too high, the issue was – says the manager – “I can’t go on having complaints every night.” So we moved.

MDT – You also had complaints when you moved to Sintra…
FC – Yes. We had another set of complaints when DD opened at Sintra Square basement. Not because of the noise, but because of the proximity of the Portuguese School. Sometimes [at odd hours] parents would bump into their children arriving to class…