n an interview, Lawrence Ho, co-chairman and CEO of Melco Crown Entertainment Ltd., said prospects for Macau are improving amid signs of rising consumer confidence in the U.S. and a major economic stimulus package in China. Ho's father, Stanley Ho, is the market leader in Macau's casino industry. "People have regained their confidence in the market. Confident people will travel a bit more," said the younger Ho.
Still, the opening Monday of Melco Crown's us$ 2.4 billion City of Dreams - which when fully completed will have three hotels and about 520 gaming tables - also shows the signs of less-ambitious times. Ho said the complex is opening with about 7,000 employees, instead of the 10,000 or more it might have hired two years ago, and initially would open only seven of the 12 special rooms dedicated to the high-rollers known as VIPs. "Now, the philosophy is, 'let's try to be a bit more modest,'" he said.
Ho also said Melco Crown hasn't yet set a date for beginning work on a us$ 330 million apartment-hotel development at City of Dreams. He said the company will await results of sales at a similar property at the Four Seasons hotel at the Venetian Macao, the rival casino across the street owned by Las Vegas Sands Corp.
The City of Dreams marks the only major casino opening in Macau this year and the second major complex to open in Macau's Cotai area, which some casino operators - notably Las Vegas Sands chief Sheldon Adelson - hope will someday draw large numbers of mass-market tourists like the Las Vegas Strip. Macau already outgrosses the Las Vegas Strip in gambling revenues by a wide margin, but most of that money is spent in casinos on the Macau peninsula.
After years of heady growth, Macau is grappling with the global economic slowdown and tighter visa restrictions for many would-be visitors from the key mainland China market. Ho said he was dubious of claims that China had eased some restrictions in recent months.
So far this year, Macau has suffered, but less than Las Vegas. In the first three months of the year, gross gambling revenue fell 13% from the year earlier to us$ 3.8 billion. Over the same period, the Strip's gambling revenue has fallen 17% to us$ 1.39 billion.
City of Dreams marks the first foray into Cotai by a member of Macau's Ho gambling family, which has dominated the industry for decades. The other major investor in U.S.-traded Melco Crown is James Packer, chairman of Australia's Crown Ltd. and himself a member of a casino-owning family.
Ho said the opening of the City of Dreams could help lure traffic to Cotai that would benefit all operators and make fighting over existing customers less likely. "If we do well, the Venetian does well, other properties in Macau are going to do well," said Mr. Ho, who has hired the Venetian's former chief marketing officer.