Entrepreneur proves Macau’s a sure thing

DR. STANLEY HO HAS BEEN SYNONYMOUS WITH THE TERRITORY'S GAMING ACTIVITIES FOR FOUR DECADES, BUT NOW HE IS FACING HIS TOUGHEST CHALLENGE YET - THE LIBERALIZATION OF THE SECTOR AND THE ARRIVAL OF AMBITIOUS BUSINESSMEN FROM LAS VEGAS. LUCKILY HIS DAUGHTER IS A CHIP OFF THE OLD BLOCK

DR. STANLEY HO Managing Director of STDM and SJM

IF THERE IS ONE NAME that stands out from the crowd among Macau’s business elite, it is that of gaming mogul Dr. Stanley Ho. For four decades, Dr. Ho’s flagship company, Sociedade de Turismo e Diversões de Macau (STDM), has controlled the lucrative gambling monopoly in the territory. With an impressive 11 casinos, STDM last year notched up net profits of around $229 million.
Ironically, Dr. Ho is no gambling man himself, though he confesses to the occasional game of bridge. “The people call me Mr. Macau, or sometimes the King of Gambling, which I really cannot accept, because I am not a gambler,” he says. “I have never gambled in all my life.”

In recent years, STDM has diversified from gaming and entertainment into a wider range of businesses, spanning transportation, infrastructure, tourism and the media. Dr. Ho has interests in all the most important hotels in Macau, including the Hotel Lisboa, the Hyatt and Mandarin, plus jetfoil and helicopter services between Macau and Hong Kong. A regular sponsor of major events, like the Macau Grand Prix, STDM has also contributed financially to the construction of the New Macau Maritime Terminal and the Macau Cultural Centre.

From humble origins, he first came to Macau in 1941 to escape the Japanese occupation of Hong Kong during World War Two. Dr. Ho’s interests are not just in casinos: no man has contributed more to Macau’s overall economic development than he has.

A MAJOR LANDMARK is the $150 million Macau Tower, which opened at the end of 2001, and now dominates the city’s skyline

At the opening of STDM in 1962 Dr. Ho’s goals were to bring new prosperity to Macau, to pull Macau closer to Hong Kong by introducing high-speed ferries and to improve the welfare and living standards of the citizens. Now, the billionaire has achieved his vision. He employs around 12,000 people, while the gaming industry accounts for some 40 percent of the territory’s GDP. As one of the city’s great ambassadors, he has noticed some profound changes in Macau over the years.

“I think we are proud of Macau now,” he says. “Because unlike some of the old period, when we had triad wars and gang wars, now, from the point of view of security, we are a very safe city. All the triads are locked up, so there is no more violence, no more killings. And also the monetary authorities are very tough. They are adhering to world standards, so we have no money laundering. It’s really a very clean city.”

But after 40 years in charge of Macau’s gaming sector, Dr. Ho is now facing one of his toughest challenges yet, with the imminent arrival of competition from the U.S., following the government’s liberalization of the industry. Soon, Dr. Ho will be competing against two of Las Vegas’s most successful gaming tycoons, Steve Wynn and Sheldon Adelson, who are pledging to invest more than $1.6 billion in rival casinos.

But the 80-year-old is a tough cookie himself. He says he welcomes the challenge of facing competition from some of the world’s finest gaming entrepreneurs. A regular visitor to the U.S. gambling mecca, he says he is a great admirer of both men. “I have always believed in challenges,” says Dr. Ho. “As long as they are friendly challenges I think it can be beneficial not only for Macau, but for all three of us. Challenges help to improve operations and I am taking the lead.”

STDM’s subsidiary, Sociedade de Jogos de Macau (SJM), has recently signed a new gambling licence with the government, and continues to operate STDM’s 11 casinos.
SJM has embarked on an ambitious investment program covering not only gaming-related projects, but also cultural and tourism schemes – for example, the extension of the Hotel Lisboa, the Fisherman’s Wharf and the inner harbor redevelopment project.

“Our aim is to turn Macau into a unique city in the region, not only for gambling, but also for culture, for entertainment and for relaxation, which is also a target set by the Special Administrative Region government,” says Dr. Ho.
“I still believe that tourism and entertainment are the answer for the future of Macau. We will continue to invest and plough profits back into society as we have done in the past, for economic, social and cultural development,” he adds.

PANSY HO Managing Director of Shun Tak Holdings Limited

Dr. Ho’s 40-year-old daughter, Pansy, Managing Director of Hong Kong-listed Shun Tak Holdings Limited, another STDM-related company, is also working towards this objective. Recently appointed to the board at STDM, Ms. Ho believes that the stimulus provided by the new casino operators will have a significant impact on the Macau economy. “I believe that, with their presence in Macau, not only will we benefit from their expertise and their database – obviously they will market their facilities to the U.S. – but the fact that there are now American investors goes a long way towards proving that Macau is ready to position itself on the map as a worthy tourist destination.”

But the strategy, she says, will be a little different from her side. “Instead of competing in terms of the size of convention and exhibition facilities, I think we are going to offer something that has a little more of a creative edge and make it an entertainment-rich complex,” she explains. “This way, when people select our facilities for smaller and more catered meetings, they could also benefit from using the other entertainment facilities at the same time.”

An illustration of Ms. Ho’s business acumen is the strong performance of Shun Tak Holdings on the Hong Kong stock market at a time when other companies, led by respected executives, have wavered.
There is a solid business foundation to the group, which is inextricably linked to her father’s STDM organization. Its shipping division operates one of the world’s largest fleets of high speed jetfoils and dominates the ferry service that plies between Hong Kong and Macau 24 hours a day. It also manages and operates the $150 million Macau Tower, which opened at the end of 2001 and is now a major landmark on the city’s skyline.
Ms. Ho believes that this multiple approach – investing in tourism, transport and associated facilities to feed off the gaming industry – will stimulate growth throughout the Macau economy, resulting in new jobs, more visitors and a better standard of living for everyone.

AMBITIOUS investment is set to boost cultural and tourist facilities, including the extension of the Hotel Lisboa, and will benefit STDM’s transport interests which feature a large fleet of high speed jetfoils

“I think we are well positioned for growth,” she says. “All it takes is for both the government and the private sector to quickly put together some really fantastic products and to do a lot more in terms of training. When the market grows and when new investors put in the bigger 800 or 1,000-room hotels, we will need a strong service industry to support that.”
Her father agrees that the underlying prospects for growth in the territory are immense following the handover in 1999 and, more recently, China’s own accession to the World Trade Organization.
Dr. Ho says Macau can serve as a platform for outsiders looking to trade with China. He is a great believer in professional management and can offer a few words of advice to any young entrepreneurs: “Never accept ‘No’ for an answer so easily. Work hard.”