30th November 2023 – (Hong Kong) As Macao’s casino operators invest heavily in non-gambling offerings, the city’s entertainment scene is booming, most visibly through a spate of star-studded concerts aimed at bolstering tourism. This “concert economy” illustrates Macau’s strategic shift from an overreliance on gaming to promoting cultural events that broaden its economic base.
The government’s 2024 budget projects gambling revenues will top 216 billion patacas ($26.8 billion), the first time exceeding 200 billion patacas. Casino operators are striving to help achieve this target while also catering to new demographics through entertainment, said Angela Leong, co-chairperson of SJM Holdings.
With license renewals secured last year, all six operators are allocating more resources to non-gaming amenities and facilities. These efforts align with Macao’s goal of increased tourism driven by arts, culture and live events rather than just the casinos.
Big names like Jay Chou have held sold-out concerts in Macao this year, priming its “concert economy.” Entertainment activities are flourishing, with operators actively organizing cultural events to attract diverse visitors. For instance, Sands China has hosted 65 shows in 2022, drawing over 460,000 attendees.
Sands China president Wong Ying-wai said the concert economy stimulates non-gaming sectors like hospitality, dining, retail and transport, creating a multiplier effect. He sees strong potential in Macau developing this sphere and fulfilling its license obligations to invest in non-gaming.
New hotel properties like Andaz, Raffles and The Karl Lagerfeld this year expanded room capacity to around 45,000. But Hoffman Ma of Success Universe downplayed concerns of oversupply, citing pent-up demand after years of border restrictions. With average hotel occupancy topping 90% in 2019 and October daily visitor arrivals reaching 75,000, he believes tourism will sustain occupancy rates.
Yet some experts say Hong Kong cannot readily replicate Macao’s entertainment model. Terence Chong of Chinese University of Hong Kong noted concerts themselves are not big money-makers in Macao. Their profitability stems from luring high-value visitors who boost gaming revenue. Absent similar dynamics, concerts may do little to spur broader local growth.
Venue constraints like Hong Kong Coliseum’s 12,500 seats also inhibit scaling up events. Chong observed some nearby cities boast 90,000-seat facilities. While the new 50,000-capacity Kai Tak Sports Park may somewhat ‘regain Hong Kong’s concert hosting rights’ when completed in 2023, transport upgrades are still needed to handle huge crowds.
As an international financial centre, Hong Kong should play to its strengths in banking, fintech and business services instead of chasing entertainment, according to Chong. Developing the industries that make Hong Kong globally competitive remains vital.