Stanley Ho describes tough times ahead for over-expanded Macau. But he says he prefers looking ahead, not backwards
The blue skies over Macau have suddenly turned stormy. How do you see the current downturn?
Macau has weathered many different climates in its history and during my lifetime, and its resilience and flexibility have enabled it to overcome all. The current downturn is just that: an economic slowdown that, while it may be deeper and longer lasting than some periods in the past few decades, will eventually prove to be temporary.
How much of the downturn is a result of Chinese visa policies and how much is due to the global financial and economic crisis?
The most important challenges facing Macau result from the global financial and economic crisis. Continued expansion of Macau¡¦s facilities depends to some extent on credit availability, and continued revenue growth for Macau¡¦s tourist businesses depends on the economic prosperity of our visitors. Both are under threat in the current global situation. However, despite the current unfavorable economic situation, the gaming industry of Macau still achieved actual growth last year.
Has the slump forced you to change your expansion plans?
Our sound financial position and cash flow from operations provide us with a flexibility to undertake expansion plans. We are proceeding with our plans for new developments in 2009. We will open three new facilities this year, all on the Macau Peninsula and each targeted at specific demographics. We are funding all of these projects ourselves.
Are you reevaluating your strategy for competing with the new casinos in Macau? Can you tell us about that strategy?
Our competitive strategy, which has been our strategy since the new concessions were awarded in 2002, has not changed. SJM [Sociedade de Jogos de Macau] aims to compete by providing modern, attractive casinos in prime locations, such as at the Lisboa district and the points of entry into Macau (for example, the Outer Harbor and the Inner Harbor), reaching important segments of the market ¡V from high rollers to mass-market visitors.
You¡¦re 87 years old now. In memory, what is your favorite era in Macau?
I would rather say that I am 87 years young.
I don¡¦t really have any preference for a particular era. I have always loved challenges and I firmly believe that the best is yet to come.
Did you ever think Macau could expand as much, and as rapidly, as it has?
I was not surprised by Macau¡¦s rapid growth since its return to China in 1999 ¡V look at the growth stories of Hong Kong, Shenzhen, Shanghai, Beijing and China itself. However, I have to admit that the gaming industry has expanded too quickly since liberalization. To give an example, the total number of gaming tables offered by Sands on its first day of opening was nearly the same as the total number of gaming tables offered by the 11 casinos of STDM [Sociedade de Turismo e Diversões de Macau] after 40 years of operation in Macau.
There were some pretty ugly anti-government demonstrations recently in Macau. Are social tensions rising because of all the recent changes and development? What should be done about that?
In the last few years there have been several demonstrations in Macau, but I would not characterize them as ¡§pretty ugly¡¨ in any relative sense. Social conditions in Macau are under some stress caused by rapid growth and dislocation of jobs and all sectors of society are trying to find solutions but in an overwhelmingly peaceful way.
Stress will be reduced if the benefits of growth are shared by all residents, which means that large employers must take account of the sensitivities of residents regarding imported labor, that educational, medical and cultural facilities for residents must continue to be developed, and that the needs of the small business sector are recognized. As a major employer and the only locally rooted gaming concessionaire, we know the importance of our responsibilities, and we support the Macau government in its efforts to foster universal betterment for Macau people.
