The number of hotel rooms in Macau is set to increase by 39 percent over the next few years.
Official data from the Macau government disclosed on Friday show there were 17 hotel projects under construction and a further 32 projects undergoing government approval as of the end of 2016. They would together provide the Macau market with nearly 14,150 new hotel rooms. The data did not give estimated completion dates for the new hotel projects.
Macau had approximately 36,300 hotel rooms – including guesthouses – at the end of last year.
The majority of the new supply will be on Cotai, where two new large-scale casino resorts, each featuring hotels with hundreds of rooms, are being developed.
SJM Holdings Ltd, the casino operator founded by Stanley Ho Hung Sun, in February said it expects construction of its approximately HKD36-billion (US$4.64-billion) Lisboa Palace on Cotai to be completed “around the end of 2017, for opening in the first half of 2018”. The property will have approximately 2,000 rooms, according to SJM Holdings.
MGM China Holdings Ltd stated in January that the opening of its MGM Cotai casino resort (pictured) – also located in Macau’s Cotai district – would be moved to the second half of 2017. The firm had previously mentioned a second-quarter launch. The property is to feature 1,500 hotel rooms and suites, according to MGM China.
Melco Crown Entertainment Ltd is building a fifth hotel tower at its City of Dreams casino resort in Cotai. The hotel – to be branded “Morpheus” – is likely to commence operation in 2018, according to the firm. It will feature approximately 780 guest rooms along with suites, “sky villas” and duplex villas, Melco Crown said in November.
In recent years, Macau has recorded a significant increase in hotel room supply. Some investment analysts have stated this has put some downward pressure on room rates and made a hotel stay in the city more affordable for mass-market tourists. Data from the Macau Hotel Association show average hotel room rates in 2016 declined by 12.7 percent in year-on-year terms.
Preliminary data from the Macao Government Tourism Office released in January revealed that in 2016 the aggregate annual number of overnight visitors to the city exceeded same-day visitors for the first time in 10 years.
Executives in the gaming industry often state that Macau lacks enough hotel room inventory to satisfy demand from casino patrons, especially on weekends and peak periods. Analysts and consultants covering the Macau tourism industry have also suggested that the city lacks enough affordable accommodation targeting the mass-market segment.
The city’s government has said it wants to attract more families and mass-market visitors interested in non-gaming entertainment as part of its programme of economic diversification.
Around 60 percent of Macau’s current hotel room inventory is in five-star hotels, were room rates averaged MOP1,628 (US$203.5) per night in 2016. The data provided on Friday by the Macau government did not give details on supply by type of room.
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"We forecast Grand Lisboa Palace will have EBITDA of HKD2.0 billion (US$260 million) with 330 tables by 2022, and HKD3.5 billion with 380 tables by 2023"
Credit rating agency Fitch Ratings