Interview with Arthur de Haast: ‘There’s plenty of people wanting to invest in Macau’

For Arthur de Haast, Chairman of the Hotels and Hospitality Group, Jones Lang LaSalle (JLL), Asia is still one of the most dynamic and exciting regions – a location eyed by plenty of investors seeking to invest in long-term development projects. In an interview with the Times during the Global Tourism Economy Forum, Mr Haast said that the Macau government has provided a solid legal and policy framework, encouraging investment. Moving forward, he believes that finding human resources specialized in tourism is one of the industry’s greatest challenges.

Macau Daily Times (MDT) – How do you see the development of Asia’s hospitality industry in the past few years?
Arthur de Haast (AH) – I’ve been coming to Macau for over ten years. The first time I came here the Cotai Strip was literally a piece of land and there were hardly any buildings here. So it’s been truly amazing and spectacular to see the way this has been developed as a destination, and the quality of what’s being done here is extraordinary. But this is just the start. We’re starting to see the emergence of new markets both as a destination and as an important source of tourism for many other countries. It’s a very dynamic and exciting region.

MDT – As the next wave of Cotai resorts is taking shape, how do you think Macau can cope and achieve sustainable growth?
AH – What Macau offers is something quite unique. I think it’s important for each destination to have a vision for what it is going to offer. Macau clearly has a very unique product, partly through legislation enabling people to participate in gambling activities. What I think is important for Macau now is to expand that offering. I know the government here is working very hard to take [the economy] beyond just gaming, attracting conferences, business, retail, entertainment, major events like boxing, and concerts. This encourages people to come back and you need that.
There’s a huge demand out there, but there’s also competition and every destination needs to think about its competition and make sure it continues to offer something that is attractive for tourists. That’s something many destinations are struggling with, because tourism is growing so rapidly in this part of the world that finding enough people – never mind people with the right skills and the attitude to work with tourists – is a real challenge for the industry, moving forward.

MDT – Human resources are one of Macau’s greatest challenges. How do you think this matter should be handled?
AH – It’s a huge challenge not just for the Macau government. If you go to the Middle East, another region that has a huge growth in tourism, they also have policies where they’re trying to get the right balance between ensuring employment to residents and providing enough skills and people to meet the tourism industry needs. It’s a very difficult balance and I can see why governments are often struggling. It’s very important to provide employment for residents. But – with the scale of demand – there’s enormous pressure on countries to accommodate this, and they have to allow some people in, in order to meet the skills gap.  One of the things the Macau government should focus on is education of the local residents, as tourism is such an important part of the economy. So putting in place strategies for education and to improve people’s skills.

MDT – You’ve mentioned competition in the tourism sector. Who are Macau’s greatest competitors in your opinion?
AH – Singapore, which recently allowed gaming in a very controlled manner, and has developed a couple of resorts. I think there are other governments in the region also talking about exploring gaming, like the Philippines. For sure, the competition is not going to be lowered, so the government is aware of that and that’s why they need to continue ensuring that the product here remains competitive.
MDT – In today’s forum session you mentioned that developing the Maritime Silk Road implies cooperation between public and private sectors. What role could each play?
AH – Essentially the government needs to create the framework for the evolution of this Maritime Silk Road concept, which is a combination of tourism and economic development. Government needs to put in place legislation, ease of travel, allowing capital and investment to flow between countries, fair taxation and all infrastructures that enable commerce and people to move easily. That’s the role of the government. I mentioned this big investment in Sri Lanka via a Chinese state owned company, which is investing in a big port seeking to build the project on a land  reclamation.
The vision of a government in the Silk Road can stimulate this kind of activity, but they still need the private sector to take the project forward, as they need to attract a lot more capital from real estate investors who will come and develop very specific projects. The government in Macau also created the framework and encouraged private investment. Essentially, the framework is there and the government can step back a bit and let the project continue, and there’s plenty of investment and more people wanting to invest here in Macau.

MDT – There are two sides to the real estate market in Macau, making it one of the city’s greatest issues. Residents, on the one hand, struggle to buy or rent a house, and on the other, real estate companies seek to make a profit. How could this be balanced?
AH – It’s not only Macau facing that challenge but also Hong Kong, Singapore, a lot of countries in this region. We have an incredibly fast growing economy. People are luckily earning more money and they want somewhere reasonable to live. Unfortunately, real estate is a fairly slow process. It takes time to build a block of apartments, so very often you have this situation where demand is running ahead of the supply and that is clearly a challenge here in Macau.
In some markets like Hong Kong and Singapore, they’ve introduced measures to try and cool down the market but fundamentally the problem is that demand exceeds supply, so even if the governments take measures, unfortunately I think it will only have a small impact.
It’s interesting to look at China and the government’s policy now, stating that actually we’re reasonably confortable with the economic growth rate coming down a bit because it has been very hard to keep up, if you’ve got an economy that is growing so fast…

MDT – What is the focus of JLL in Macau now?
AH – We are a global real estate services company, so our focus is to continue to work closely with people on the ground here. Because real estate is fundamentally a local business, you need to understand what’s happening here, so you can give good advice from a demand and supply perspective. What we are focused on is helping investors to find the right opportunity in which to invest. In my role, I am talking to investors in the US who are interested in being part of Asia’s success story.

MDT – Is Asia still the right place to invest?
AH – It is of great interest to many investors because the macro picture is very compelling. You’ve got strong economic growth; you’ve got very large populations; you’ve got a rapidly urbanizing society. These key drivers are very interesting to investors, who have to place capital on a long-term perspective. They’re looking for opportunities providing them with good steady returns in a secure environment.