Macau mania

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Section 2: Managing growth Macau maniaIt is only goingto get worse . . .Figure 26Road densityMacauMaltaBahrainBelgiumSingaporeJapanNetherlands(km of road/km² of land area)Source: The Economist0 2 4 6 8 10 12 14 16 18 20 22 24 26. . . which is bad news forroad users andpedestriansFigure 27Road accidents in Macau13,00012,50012,00011,50011,00010,50010,0009,5009,0002001 2002 2003 2004Source: Macau GovernmentProjects in the pipelineThe government recognised these problems and this was a catalyst for theissuance of new gaming licences to attract investment in public works. Thefollowing projects are either underway or planned:The bridge will halve thejourney time betweenHong Kong and MacauThree lines shouldease traffic congestion! Hong Kong-Macau-Zhuhai bridge. A 28km super bridge that will linkHong Kong, Macau and China is on the drawing board. Likely to costUS$3.8bn, it should be operational by 2010. The trip time to Macau fromHong Kong will be cut from 60 minutes by ferry to 30 minutes by road.The bridge will start at Hong Kong on Lantau Island, home of the city’sinternational airport and the proposed Disney theme park. See AmarGill’s May 2005 Cepa and beyond . . . report and Danie Schutte’s 2 June2005 Hopewell company report, Bridging up Macau, for more details.! Light rail transit (LRT) system. The MTR Corporation of Hong Kong,on behalf of the Macau government, has completed a feasibility study onthe introduction of an LRT system. It is inviting tenders and routesshould be operational by 2009/10. The first phase will be a 14km line26 nick.cashmore/aaron.fischer@clsa.com June 2005
Section 2: Managing growth Macau maniafrom the northeast of Macau under the city centre and across the SaiVan bridge to Taipa. The following year, an extension to the airport is setto be added. The final phase will be a circular line around the Macaupeninsula. The project is likely to cost at least US$1.5bn and take eightyears to complete.New terminal to doublecapacity in two yearsArrivals by air likely tojump as market develops! A second ferry terminal. The terminal, to be located on Taipa, willsupport increased traffic between Macau and Hong Kong. Set to open in2007, the terminal’s daily capacity of around 12,000 travellers willdouble the region’s existing capacity.! Taipa airport expansion. Only 5% of tourist arrivals currently come byair. However, like Las Vegas, this is likely to be an increasingly importantmode of entry as the market develops. With this in mind, the airportauthorities are about to embark on expanding capacity to 10mpassengers per year from the current 6m.State Council yet toapprove landing points forsuper bridgeIt should be noted that on 3 April 2005 the South China Morning Postreported that officials from Hong Kong, China and Macau agreed on arecommendation to be put to the State Council on the proposed landingpoints for the Hong Kong-Macau-Zuhai bridge. The Macau landing point islikely to be in the northern Areia Preta district, which will benefit the Macaupeninsula. Previously, it was reported that there would also be a landingpoint on Taipa, which would feed tourists more easily into the Cotai Strip.Macau dancesto China’s tuneToo much of a good thing?Macau may be Asia’s entertainment capital, but China is playing the music.Just as China’s rapid modernisation and growth provides tremendoustourism potential for Macau, so it is the territory’s Achilles heel. Already,almost 60% of total visitor arrivals come from China, a figure that is sure torise closer to 90% - the percentage of Americans that visit Las Vegas.Macau is not even asampling error for China’sUS$1.6tr economyGross gaming revenue in Las Vegas, for instance, has a 0.9x correlationwith US GDP growth. True, Las Vegas is a mature market whereas Macau isundergoing structural change, which means growth should remain robust forthe foreseeable future. But Macau’s prospects are intertwined with Chinamore now than at any time in the territory’s 400-year history. Yet, Macau’sUS$10bn economy is not even a sampling error for China’s US$1.6treconomy.Visitor spend in Las Vegashas risen every year ingood times and badThat said, it is worth noting that total visitor spend in Las Vegas hasincreased every year since 1970 – a period that included stagflation, warand recession as well as good times. Between 1971 and 1979 for instance,when real oil prices hit a record high and the US economy ground to a haltunder fuel shortages and job losses, visitor spend in Las Vegas tripled toUS$4.0bn. Even more recently, tourist spending in 2002 was higher thanduring the internet bubble of 2000, and this has reached new record highssince.Indeed, it would be fair to say that Las Vegas is immune to cyclical swingsin the economy, a feature that no doubt boosts the city’s appeal whenpunters are down on their luck.June 2005 nick.cashmore/aaron.fischer@clsa.com 27
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Page 73 and 74: Aruze¥2,320 - No recBen Wedmoreben
Page 75 and 76: Macau maniaCNAC - HK$1.88 - BUYSale
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Macau maniaCNAC - HK$1.88 - BUYThe
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Emperor EntertainmentHK$1.30 - No r
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Macau maniaHopewell Holdings - HK$1
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Macau maniaHopewell Holdings - HK$1
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Macau maniaK Wah Construction Mater
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MelcoHK$8.95 - No recAaron Fischer
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Macau maniaRegal Hotels - HK$0.66 -
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Macau maniaRegal Hotels - HK$0.66 -
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Macau maniaShun Tak - HK$7.35 - BUY
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Macau maniaShun Tak - HK$7.35 - BUY
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Macau maniaWing Hang Bank - HK$54.2
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Macau maniaWing Hang Bank - HK$54.2
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Appendices Macau maniaIs this the f
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Appendices Macau maniaSummary of co
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Appendices Macau maniaShortening th
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Appendices Macau maniaLinking the h
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Appendices Macau maniaAppendix 5: F
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Appendices Macau maniaBetter co-ope
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Appendices Macau maniaThe appeal of
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Appendices Macau maniaLegal changes
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Appendices Macau maniavarious shape
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Appendices Macau maniaMost formsof
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Appendices Macau maniaOther. Gambli
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Appendices Macau mania3. Jueteng in
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