Macau Matters | Exporting hotel development expertise

Richard Whitfield

In the last decade the number of hotel rooms in Macau has exploded, and this growth will continue for the next several years. Why can’t expertise in developing new, high quality hotels be an export industry for Macau to help diversify its economy?
Some years ago, a student and I did some desk research to understand the future growth in the regional hotel industry. By reviewing the annual reports of major international hotel companies and existing industry reports it was clear that opening new hotels will be a daily occurrence in East and Southeast Asia for many years to come. For example, at least six million new hotel rooms should be built in China between now and 2050. This equates to about 500 new hotel rooms opening in China every day for the next 35 years! In a recent update we found that this analysis is still valid, and is on track to be achieved.
As well as this exceptionally high growth rate in new hotel construction in the region compared to the rest of the world, the nature of the hotels to be here built is also different. Hotels in the developed world can rely on stable, high quality infrastructure – electricity and water blackouts are exceptionally rare, and large skilled and stable workforces are readily available. This is not the case in Southeast Asia. Here, electricity and water supplies can be unreliable and there is limited staff sourcing and training capacity. Thus, new and innovative ways are needed to develop and operate hotels so that they require minimal electricity and water infrastructure support and can operate with minimal skilled staff.
It surprises me, but hoteliers, architects and construction engineers are very conservative and strongly resist new innovations. I have observed this many times in my discussions with professionals in these fields in Macau. Moreover, this seems to be a global phenomenon because hotel school curricula place negligible emphasis on this issue, and international hotel companies appear to do little direct research and development (and certainly do not talk about it in their annual reports).
I see this as a significant opportunity for Macau to develop expertise in innovative hotel design, development and operations that can be exported to the region as consulting. Macau has a strong and growing hotel stock that can be a research test-bed to benefit both local hotels and to create an exportable industry. Moreover, I have always said that Macau should be a showcase for future technologies so that its tourist visibility also becomes a marketing tool for Macau expertise.
I believe that it is in the interests of the Macau hotel industry to support local hotel technology research and development to improve its own efficiency and productivity and to support the diversification of Macau’s economy.
For example, in slab cooling and heating is increasingly being seen as a very cost effective alternative to conventional air-conditioning, but it has never been tried in Macau. Similarly, I do not understand why hotels still have front desks for check-in and check-out – why not take a lead from the airlines which now mostly use online bookings, electronic tickets and self-serve baggage checking to provide much quicker and more effective service while also eliminating many of the people hand-offs for passengers getting on and off airplanes.
I am sure that universities in Macau would be very interested in collaborating with local hotels on industry research and development. It is just a matter of will and interest.