Macau's efforts to diversify its economy away from betting tables have yet to yield much success, raising questions whether the world's largest casino hub can achieve its goal of becoming a broader tourist venue.
Fourteen straight months of declining gaming revenues have cast a gloomy shadow over Macau. The former Portuguese colony was once a hotbed for junkets of Chinese government officials and tycoons but Beijing's heated corruption crackdown has deterred lavish VIP spending, which makes up the bulk of Macau's gaming revenues. During the second quarter, leading casino operators reported double digit losses, with Galaxy Entertainment earnings plunging 46 percent on year.
Adding to the industry's woes is a newfound weak Chinese renminbi that makes it more expensive for mainland players to gamble.
That's motivated officials to make the city less reliant on gaming revenues and lure in mass-market tourists. But building family-friendly amenities like the world's largest rooftop wave pool and a 3D museum have yet to work: Visitor arrivals fell an annual 3.5 percent in the first six months of 2015, with June arrivals tanking 7.6 percent on year, the worst performance since September 2012.
Macau's non-gaming activities accounted for less than 10 percent of gross revenues at its resorts last year, compared to 63 percent for Las Vegas, known as the poster child of diversification with its nightclubs, shows, and celebrity chef restaurants, Alex Bumazhny, director of Fitch Ratings, said in a Tuesday note.
"The biggest challenge for Macau casinos is to try and figure out what non-gaming amenities to develop," Grant Govertson, principal analyst at Union Gaming, told CNBC.
Because the government has yet to clearly state what it is looking for other than "diversification," there's confusion between what operators think the government wants them to build and what operators think customers will like, he explained.
Even Melco Crown Entertainment CEO Lawrence Ho admitted that nobody visits Macau for non-gaming amenities.