Since the end of Covid restrictions and collapse of the pre-pandemic junket system, a paradox has emerged in Macau tourism. Macau authorities want to create a global destination less dependent on gaming. Macau’s six gaming concessionaires largely driving tourism express commitment to that goal yet continue to focus on high end gaming, frequently at the expense of accommodating other visitors.
Galaxy Entertainment Group chairman Francis Lui suggests satisfying both goals through “parallel strategy,” developing premium gaming and non-gaming amenities concurrently along separate tracks. Not just talking the talk, Lui leads Galaxy’s parallel walk, as always, closely in step with Macau’s governing authorities.
“The vision in Macau is that it has to be sustainable, and you don’t want to bet on just pure gaming,” Lui says in an exclusive interview with iGaming Business. Lui acknowledges Macau’s extraordinary privilege as China’s only place for legal casinos, noting that Macau’s mainland market “under-penetration is humongous.” In return for the gaming privilege, “We try to understand and try to support what the government wants us to do.”
Widely seen as the leading voice in Macau’s casino industry, Lui reads messages from the authorities as, “Look, guys, you can continue to evolve and earn your money, but at the same time, there’s some social responsibility, economic values that you have to create.”
Third phase the charm
Lui believes Galaxy Macau Phase 3 “represents the government vision as to what they want Macau to be. We sort of sensed it a few years back, and then we decided that Phase 3 is going to match that vision.
“So we decided to build the MICE and arena, and the key is that we do want to do it top notch. Because at the time, we’re also thinking about regional competition, that we have to do something special, where we would be able to compete with regional cities like Hong Kong, Singapore. So this is why we didn’t spare any dime at all in making sure that our MICE facility is state of the art.
raffles hotel is part of galaxy entertainment’s phase 3 development mixing premium gaming and abundant non-gaming attractions.“We did something that everybody could be proud of, and I feel proud because I feel we are a major contributor to making, in the last three years after coming out from Covid, Macau a city of entertainment and city of sports.”
Opened in 2023, Galaxy International Convention Center and Galaxy Arena can combine to create 10,000 square meters (108,000 square feet) of pillar-free ground floor space amid the latest event and broadcast technology. Seating 16,000 with eight luxury suites, Galaxy Arena is Macau’s largest indoor venue. A 715 key Andaz hotel tops the complex.
Luxury track
“Along with the MICE and the arena, we built two other premium hotels, Raffles and Capella, because we also felt the customer base has now changed to a more multi-experiential demand,” Lui says. “This is why we felt Capella and Raffles is the model for the next phase development. And since then, you see a lot more other people now following, building up premium hotel rooms. So we like to say that we were pioneer. So from VIP to mass to premium mass, we see diversification.”
Since Macau’s high end guests favoring Raffles and Capella inevitably gamble, each hotel has a premium gaming area with private salons. Exclusive non-gaming amenities include top shelf F&B, bowling, golf simulator, spa, barbershop, 8-seat movie theater and karaoke.
opulent penthouse suite at capella, officially launched in February as the second ultra luxury hotel in galaxy macau phase 3.“It’s a very different business model that we’re evolving into. In 2019, the business model was a less regulated model, more a VIP-centric model. Now we are moving into a more sustainable business model,” Lui says. “We are equally happy that, as we are moving from the 2019 model, we are still keeping our profit more or less the same as we were making. In the meantime, we are supporting the vision of the government. I still feel this is the right model.”
With Phase 3 additions, Galaxy Macau offers 5,000 guest rooms across nine brands, dozens of food and beverages choices, a massive gaming floor with hundreds of tables and slot machines, the Grand Resort Deck featuring the world’s largest rooftop wave pool and Galaxy Promenade, a 100,000 square meter shopping mall with 200-plus outlets. Galaxy habitually runs first or second (to Sands China) in Macau’s gaming and profit tables. Galaxy’s group EBITDA exceeded US$1.8 billion last year, compared with US$2.1 billion in 2019.
Evolution in four phases
Galaxy’s parallel strategy continues with Phase 4, scheduled to open next year, introducing more new-to-Macau luxury hotel brands, a 5,000 seat theater, extensive retail and F&B, its own resort deck and a casino. With Phase 4, Lui estimates total Galaxy Macau capital investment reaching HK$100 billion (US$12.75 billion).
in keeping with macau’s emphasis on non-gaming attractions, Galaxy built the city’s largest indoor arena with 16,000 seats.“From day one, we decided we wanted to build out our piece of land in four phases [because] we felt the clientele was evolving very fast,” Lui says. “I feel that we did the right thing by carving out four phases, so that each couple of years, we were able to gauge what consumer evolution [and] preference is going to be, and do something new.”
In Phase 4, “Initially, we were thinking about building 2,000-2,500 hotel rooms. Since then, because we read the market and it is more premium centric, now we’re able to reduce the number of rooms to only 1,500.”
Lui acknowledges that fewer, more luxurious accommodations runs counter to the government goal of making Macau a world center for tourism and leisure that’s less reliant on gaming. “This is why it should be a parallel strategy, where at one time we should be looking after our premium players, because we are competing with regional cities like Singapore and Japan [MGM Osaka, a US$9 billion IR, is expected to open by 2031]. At the same time, we should go ahead and have government support to build more hotel rooms for family and business travelers.
Space race
“If you can find the space in Macau, great. But there’s a great piece of land sitting in Hengqin where the land cost is cheaper, the opex will be cheaper, the labor cost will be cheaper. All we have to do is make sure that logistics and infrastructure are ready when it’s done.”
An island three times the size of Macau, Hengqin is a special economic zone in Zhuhai created to foster economic development on both sides of the border. Macau’s light rail crosses the narrow channel from Cotai to Hengqin, but visa restrictions forbid multiple entries into Macau by mainland visitors, with a recent exception for group tour guests.
Lui revealed that Galaxy no longer holds an option on land in Hengqin where it had proposed creating a seaside resort. But he remains bullish on the island.
“We should take a look at Hengqin because when you talk about from 40 million to 50 million visitation, man, you are talking about a lot of hotel rooms to make sure they stay with us. You don’t want people to [sightsee] with us and go back to Zhuhai the same night, right? You want to hold on to them.
“I feel that if Hengqin becomes more seamlessly connected to M…