Macau has left Las Vegas behind as a gaming centre. Now it aims to do the same to the world of luxury hotels. One entrepreneur has begun building what he claims will be the world’s most luxurious and extravagant hotel and casino, hiring a Bourbon princess and changing his company name to Louis XIII to attract China’s wealthy high-rollers.
Stephen Hung, a former Hong Kong banker with a penchant for flashy cars and bespoke Versace, broke ground on the project last week. The hotel’s top suite will cost $130,000 (U.S.) – nearly half as much again per square foot as similar suites elsewhere.
“I want customers to say they went to the Louis XIII because it’s the best and the most expensive,” said Mr. Hung, who has given his managers permission to pay staff up to 30 per cent above market rates. “I don’t want to do a Vegas or Disney-style copy because those are not the real thing.”
Macau visitor numbers are rising by about 20 per cent a year and its gross gaming take passed $38-billion last year – more than six times the size of Las Vegas. The former Portuguese colony’s casinos are increasingly targeting mid-market tourists but have a history of courting China’s wealthy.
“The willingness of mainland Chinese to spend money on the very best is unprecedented,” said Mr. Hung, who also plans an invite-only atelier of luxury brands offering bespoke couture. Graff Diamonds has already signed up.
Princesse Tania de Bourbon Parme, a designer and descendant of Louis XIII, is special adviser to Mr. Hung. Paul Marino, best-known for designing luxury brands’ flagship stores, is to be appointed concept architect.
China’s recent crackdown on corruption and the practice of gift giving has dented luxury sales in the region, but Macau bulls remain confident in the city’s longer-term future.
“The risk here is project execution. Absolutely there’s significant demand from China for bespoke-level luxury and this project addresses that niche,” said Aaron Fischer, head of consumer and gaming research at CLSA, the brokerage. “But these guys also need to deliver quality services to match the relatively high prices and attract luxury brands that are prepared to offer customized products.”
The company, formerly Paul Y Engineering, a well-known construction contractor in Hong Kong, raised half its HK$6.4-billion ($820-million) development budget from selling new shares and convertible bonds earlier this year. It is in discussions with several banks for the rest of the funds.