‘Macau should lead in hospitality’ in GBA
With the largest stock of 5-star hotels worldwide, the city should set the standard in hospitality in the Greater Bay Area and Greater China, Wilfred Wong, president of Sands China Limited (SCL), has affirmed, boldly.
In an exclusive interview with Macau Daily Times, Wong said his company is “trying hard” to serve that goal, especially through its incubator and training programs for staff and small and medium enterprises, organized in highly specialized academies.
SCL is expanding the current two academies to eight, namely in hospitality, integrated resorts management and MICE.
On the business front, Wong revealed during Labor Day week the gaming concessionaire’s properties recorded over 1.1 million visitors —a number that resembles the good old days—with the gaming results curve surging in a V-shaped fashion.
However, Wong cautioned these “extraordinary” results benefit from three or four holiday periods in the mainland and Hong Kong. He warned the “big test” will be in the summer, June and July, typically the weakest season in gaming.
Also, the visitors’ profile has changed to a more spending-cautious, less affluent and younger clientele.
In the interview, which took place at a spacious VIP suite at Four Seasons, Wong commented on the new concession contracts and the fairness of the government requirements, mainly the investment in non-gaming activities and infrastructure toward diversification, the biggest-neglected word in town for decades.
Sands will do “our part,” but again, he is sure non-gaming won’t pay the bills: “We feel it as an obligation” to give back to the community.
This evening, the grand opening of The Londoner takes place, an all-suites 6,000-room integrated resort, which is proving to be a “sensational” attraction in the SCL universe in the post-pandemic period.
Macau Daily Times (MDT) – Is the Londoner integrated resort finally complete?
Wilfred Wong (WW) – Yes. The Londoner, the $2 billion investment, is now complete. And that includes the Crystal Palace, the external wall, the Big Ben, the Elizabeth Tower, all the conversion of rooms at The Londoner into suites, as well as the shopping mall, creating the atmosphere of a street in London. The 6,000-seat arena, it’s now complete. Now, The Londoner has 6,000 rooms. Sheraton Grand was the largest, with 4,000, and in the next phase we are going to upgrade its rooms.
MDT – But keeping the same level of service?
WW – That is something to be discussed. But [the upgrade] is going to happen. This year or early next year. Sheraton, Conrad, these hotels that are on the top of the podium, are due for renovations and upgrades.
MDT – So, this evening, we’ll have The Londoner grand opening ñ you call it the Grand Celebration ñ and thereís going to be a big party, I heard, and of course David Beckhamís attendance. What else?
WW – Yes, Beckham will be here. What else? There will be a performance at the arena. It will be a very attractive performance.
MDT – Can you be more precise about who?
WW – No, they want to keep it a secret [laughs].
MDT – How many people are you expecting at the Grand Celebration?
WW – At the arena there will be up to 4,000 people and then we also have a gala dinner, which will sit over 400 guests.
MDT – We can count on a ëwowí surprise; is it going to be a Chinese or Western star? Or both?
WW – That is narrowing it too much [laugh]. Let’s say: international. It could be Chinese but internationally [known].
MDT – Reading now from a press release, the integrated resort hotel will offer 6,000 rooms in total, over 20 dining options, and 150 renowned brands. Is the visitation and occupation rate up to your expectation?
WW – Well, throughout the two years after the soft opening with COVID in between, The Londoner has established quite a strong brand name. I mean, how many people talk about the Cotai Central anymore? Nobody. So The Londoner has taken over, [and] so far, the business has been very good; Londoner is a very much sought-after hotel.
MDT – Comparing to The Parisian?
WW – The Parisian is more business class; The Londoner is super luxury. And so, the clients pay more for the room, also we complement them more. The room includes breakfast, afternoon tea and… everything. It is a package of total experience that we offer to visitors to the Londoner. Ever since we opened Macau throughout all the long holidays we had this year, The Londoner has been very well-patronized.
MDT ñ But the labor shortage is still a problem thereÖ
WW – It’s getting to be less of a problem. Because when we first began, we could only serve at the whole property up to about 70% of our rooms because of the labor shortage. But now – because the government’s responded very quickly – we have been recruiting about 100 people a week! And we have ramped up a lot of staff just last week for the back of house. Housekeeping, receptionists, security, maintenance – all those rank-and-file positions.
MDT – Where are they coming from?
WW – A lot of them from mainland China. But some of them are returnees, former employees, from the Philippines, from Vietnam, who left us during the pandemic. Some of them are coming back.
MDT – How many more do you plan to recruit?
WW – [Since the reopening of border] we’ve recruited over 2,000. And more to come. But right now, we can service up to 11,000 rooms.
MDT ñ And how is the occupancy rate?
WW – We were either 100% full or high 90% over the Labor Day holidays. Total visitation of all properties during China’s Labor Day Holiday, which took place from April 29 to May 3 is over 1.1 million.
MDT – You already mentioned the 6,000 Arena and the 1,000-seater Theatre. With all that jazz, what can we expect to be seeing in terms of shows? And is it going to be more Chinese Asian or international, Western, or both?
WW – The arena is really multipurpose. It can put on performances, it can put on sports events, it can put on MICE events. So the idea is that now with two arenas, one in The Venetian and one in The Londoner, we can have over the weekends, entertainment programs, together with MICE events, whereas in the past when we only had one arena, we could only have either a MICE event or an entertainment program. Now, if we have a big MICE event, and we have an attractive entertainment program, they can go hand-in-hand. This is very helpful for the MICE sector for attracting events in Macau. And we are using that for inviting international performers, not just local. But obviously, there’ll be more local, there’ll be more Chinese, Hong Kong, but we are also looking at overseas performances.
MDT – Also, one of the requirements put up by the government for the new concessions is to attract the international markets. So how is it going so far, and what is your strategy, and which are the target markets?
WW – We are going to promote Macau as a tourist destination, as a destination for integrated resorts. And therefore, for example, we are going to organize overseas promotion campaigns. In June, we are going to have a Macau showcase in Singapore. And it’s not just Singapore. In the future it will be in other cities.
MDT – Is it mostly focused on Southeast Asia?
WW – No, it could be Japan, it could be Korea, it could be India. But you know, obviously the areas where we have the most potential visitors. So, we’re also expanding our overseas office network. For example, our offices in Taiwan, Malaysia, Indonesia, and Singapore. We are also sending out private jets to bring the high rollers to Macau. And right now, it’s either Southeast Asia or North Asia, like Korea or Japan. And this is proving itself effective. Because, for instance, sometimes a certain group of people, they like to come and enjoy themselves together. And if we have a private jet that takes 12-14 people, they can come as a group, and we give them a foreign playing area in a room. So, they have a club for them. And this is beginning to take shape.
MDT – Top businessmen, is that what we are talking about?
WW – Yes, I mean, these are people who’ve got high rolling capability, otherwise, we would not be inviting them on a private jet.
MDT – So, about the diversification – that’s always has been a big word here, but now it is in writing in the concessionsí contracts. What is the strategy for non-gaming, in order of importance on the budget?
WW – We have promised that over the next 10 years we will invest MOP30 billion and of those, 27.8 billion will be invested in non-gaming. In front of the Eiffel Tower, we are going to convert that garden into a covered area with a Botanical Garden so that it becomes another icon for the market. We’re going to build a new convention facility exhibition in the lawn in front of the Venetian exhibition hall. So that will add another 18,000 square meters of exhibition space. For example, yesterday, we signed a MoU with an organization to promote [an inventing] competition at Beyond Expo, and all these inventions can be tested in our properties. So, if you have an idea, you want to test an app, we can be your guinea pig. We are growing our commitment to SMEs, continuing to prioritize the hiring, training and horizontal and upward mobility of Macau residents. To support that effort in particular, Sands China will establish six new academies focusing on MICE, hospitality, integrated resort management, facilities, responsible gaming and entertainment, bring the total to eight. The two existing academies are Retail and Procurement. And so, we will use these academies to drive service standards. And hopefully, we will we be able to spread our influence into China, into the Greater Bay Area.
MDT – Will you expand to Hengqin? In terms of hotels, non-gaming?
WW – Not at this stage. Because obviously, we still have a lot to do here in Macau. But we will be spreading our influence but not through the building of a hotel. But if the opportunity arises, we will look at it.
MDT – I am hearing all these numbers that are being budgeted, and wondering whether the pandemic had an impact on your budget…
WW – Of course the pandemic has had an impact on our financial performance. And the last two years have been really difficult for any company. But we are confident about the future because we now have been given another 10 years. And we are thankful for the government in giving that to us. We will keep our promise as we did in the last 20 years. We kept our promise. We built everything we promised the government we would build before the concession ended. And we intend to do the same thing and make good on our promise in the next 10 years. And if the opportunity comes and there are more investment opportunities, then we will have to look at our own capability and to see whether we can take up the challenge.
MDT – Right after the so-called Big Six signed the new contracts, there was a ëgiftí from China, the opening of the borders in December, which was very good for business. Altogether you faced problems like staff and other shortages. You were not expecting this at all?
WW – No, we weren’t. We were expecting that there would be a gradual ratcheting up. But then with the change, the pent-up demand is there. And therefore, we do have the business coming back very quickly, especially because immediately after the opening-up was the Chinese New Year holiday. That helped. Because that pushed a lot of people to come. Many of them have not been to Macau for three years. They were very eager to come. And because we have the Grand Suites in The Londoner, the whole thing was new. And that helped us to attract a lot of customers to our place.
MDT – What is your forecast for this year in terms of GGR?
WW – It’s very difficult.
MDT – Well, your first quarter is on the upper side of the government forecast for the year, MOP130 billion ($16 billion). Do you think is achievable, even beatable?
WW – I think it’s achievable. If you look at the first quarter, Sands China’s GGR was $398 million [adjusted property EBIDTA].
MDT – It will be over the government estimate.
WW – Let’s say, yes. But we cannot be too boastful. The fact is all this is happening against the backdrop of an economy in danger. The Chinese economy is developing slower. All of this has an impact. Now, what will happen in the second half of the year? Of course, we hope we will do better. But we have to weigh against what’s happening globally.
MDT – Do you believe that China has a plan for Macau not being so reliant on gaming, which is very volatile. And do you believe Macau can grow another strong sector to balance the act?
WW – Obviously, this is the intention of the government, that they would like us to invest in non-gaming to diversify the economy hence the hospitality business. So, do we see that happening very soon? Probably not. Because, you know, you have to build up all this investment and direction, and you have to wait for Hengqin to materialize, because Macau has very little land available. So, all of that takes time. But we can see that in the direction. And the government is pointing in that direction.
MDT – Do you think that the deal with the government for this new concession and all the requirements they put in is a fair deal?
WW – I think it is a good deal, in the sense that we are not building a lot of new buildings. The investment we have is really a diversification investment in the future. And I think we have the responsibility to help. And so, I think it is a good deal. Whereas in the past, you know, we invested so much money in all these buildings, whereas for the next 10 years, we’re not required to do that.
MDT – In the economic pie, the share of gaming in the past went from 60 to 80%. In the next 10 years, what do you think that will be?
WW – I think it depends on how you count. If you count tourism as separate from gaming, then obviously, with more events, the income from the tourism industry will increase. Also, the investment, for example, in high technology and finance sectors, all of this will take time [to return results]; they will come and hopefully catch-up and have a higher share of the economy.
