Macau Matters | Hotels of the Future

Richard Whitfield

Business and recreational travel have been strongly growing in South-East Asia for many years, and this trend is sure to continue for many years to come as the region continues to develop. For example, in other more scholarly analyses I have shown that the number of hotel rooms in China should grow from about 5 million now to about 9 million in 2050, which is the equivalent of 1-3 new 200-room hotels opening every day until then.

This is a huge construction opportunity but it is also a huge maintenance opportunity because hotel rooms, restaurants and other customer facilities normally need to be completely refurbished every 7 or so years, and the kitchens, plant rooms and other hotel infrastructure needs replacement every 15+ years. Moreover, as local markets grow and develop existing hotels also need to be expanded and upgraded. (In a growing hotel market you are smart to initially buy excess land and build a smaller hotel and then fully build out the property several years later.)

However, for this future to be realized the kinds of hotels that are built and the ways that they are built need to change – we will need a lot of innovation. For example, electricity, transport, sewerage and other infrastructure developments in the region cannot keep pace with rising demand so that hotels in the future will need to be much more energy efficient and incorporate on-site renewable energy production and waste processing. Also, it will be very difficult to expand hotel education to train enough staff for all these new hotels, so that they will need to include much more automation to minimize staffing needs. Consider the question “why do hotels need check-in desks? For air travel you can book and pay for everything online and get an electronic boarding pass downloaded to your smart phone so that you simply arrive at the airport and walk straight onto your flight. Why can’t this be done for hotels?” On my recent trip to the US I found that Holiday Inns are starting to offer such services there.

Macau could be in a strong position to capitalize on this opportunity because we have spent the last 10+ years building many large, sophisticated, world-class hotels. Unfortunately, however, we have done relatively little to develop local expertise in this area. Local universities offer few courses related to building design, construction and maintenance, for example. Some effort has been put into encouraging hotel operating efficiencies with “green hotel” awards but they are too low profile. In my experience the local hotel industry association seems to do relatively little and the MGTO (Macau Government Tourism Office) is not focused on developing the local hotel support industry. Moreover, little if any local government (or industry) funding has been earmarked for hotel research and development. On this last point, I often chastise my hotelier friends asking them “where is your R & D budget?” whereas most manufacturing companies devote significant funds to R & D.

If Macau wants to nurture exportable expertise in new hotel design, construction and maintenance it needs to expand and promote education in these fields, promote hotel excellence more widely and consistently and nurture local industry and academic hotel research and development. I believe that with some effort consulting and other services related to hotel development and operations could be a substantial export industry for Macau. It builds on our existing strengths and addresses a strongly growing regional market need. Surprisingly, the Macau government’s Five-Year Development Plan 2016-2020 makes little mention of hotels, one of Macau’s largest industries.