Unlocking Macau's Tourism Potential: Hengqin's Strategic Land Use as the Key to Long-Term Growth

The hospitality crisis in Macau is reaching a boiling point. With occupancy rates soaring to 86.4% in 2024—and five-star hotels hitting 88.6% occupancy—the SAR's 43,000 hotel rooms are stretched to their limits. Visitor arrivals surged to 34.9 million in 2024, yet room supply has shrunk by 7.8% year-on-year, creating a crippling mismatch between demand and capacity. This is not just a temporary glitch but a systemic barrier to Macau's ambition to become a global tourism hub. The solution? Look across the Pearl River Delta to Hengqin Island, where strategic land use policies and integrated resort projects are poised to unlock unprecedented value.

The Hotel Shortage: A Threat to Macau's Economic Diversification

Macau's tourism recovery since 2023 has been staggering, with visitor numbers rebounding to 84.8% of 2019 levels by early 2024. Yet, the 85.8% average occupancy rate in early 2024 (and 87.8% by April) reveals a dangerous truth: supply cannot keep pace with demand. Galaxy Entertainment's Francis Lui has warned that Macau needs 15,000 additional mid-priced rooms (under HK$1,000/night) to sustain growth. Without this, the SAR risks losing its competitive edge to regional rivals like Sanya or Phuket, which offer greater accommodation flexibility.

The stakes are high. Macau's 2024 tourism revenue hit RMB2.66 billion in Hengqin-linked activities alone, but the lack of scalable lodging options is stifling progress in non-gaming sectors like health tourism, MICE events, and cultural experiences. Investors who ignore this bottleneck are missing the forest for the trees.

Hengqin's Role: A Scalable Solution, Backed by Policy

Hengqin, a 108-square-kilometer island in the Greater Bay Area, is uniquely positioned to address Macau's capacity constraints. Its 2024 land-use reforms allow commercial, industrial, and creative buildings to be converted into hotels, provided they meet basic criteria (e.g., 50+ rooms, multi-floor continuity). This policy—effective until 2026—has already spurred five approved conversions and could add thousands of rooms without requiring new construction.

The data tells the story: occupancy has risen by 10.6 percentage points since 2020, while room supply shrank. Hengqin's flexibility to repurpose existing structures offers a rapid fix.

Integrated Resorts: Where Hengqin Meets Opportunity

Hengqin's tourism infrastructure is already taking shape, with projects that blend health, culture, and convenience:

1. GMTCM Park: A 500,000 m² health-tech hub with over 235 firms, including 89 Macao-based TCM enterprises, is pioneering medical tourism. Sands China's partnership here aims to create health-focused MICE events and wellness retreats—a niche Macau's luxury hotels can't fill.

2. SJM Resorts' Lisboa Hotel: A RMB546 million project converting 14,845 m² of office space in Hengqin's Shun Tak Business Center into a 3-star “Lisboa”-branded hotel. Located near Hengqin Port, this property targets mass-market travelers, leveraging its proximity to Macau's casinos and attractions.

3. Cross-Border Connectivity: Hengqin's multiple-entry visa policies (effective May 2024) allow tourists to stay in Hengqin while visiting Macau multiple times—a game-changer for group tours and long-stay visitors.

Why Invest Now?

The strategic alignment of policy, land use, and tourism demand makes Hengqin an investor's dream. Key catalysts:
- Policy Tailwinds: China's “1+4” economic strategy prioritizes health and tourism, directly supporting Hengqin's development.
- Valuation Gaps: Hengqin's current 8,000+ rooms (as of 2023) are set to expand rapidly, but valuations remain low compared to Macau's saturated market.
- Scalability: Converting existing buildings cuts costs and time—ideal for quick ROI.

Revenue has jumped 18% year-on-year to RMB2.66 billion in early 2024, with visitor numbers up 27%. This is just the start.

The Call to Action: Seize Hengqin's Untapped Potential

For investors, the path is clear: allocate capital to Hengqin's land assets and integrated resort developers. Target firms like SJM Resorts (positioning its Lisboa brand for mass-market dominance) and Sands China (leveraging GMTCM's health-tech ecosystem). Additionally, real estate trusts focused on Hengqin's convertible commercial properties could yield double-digit returns as conversions accelerate.

The risks? Limited. With government backing, strong demand signals, and improving infrastructure (e.g., the Macao Light Rapid Transit Hengqin Line), this is a low-risk, high-reward bet on Macau's next chapter.

Final Word: Hengqin is the Key to Macau's Future

The hotel shortage is Macau's Achilles' heel—but Hengqin's strategic land use policies and projects are the antidote. By unlocking scalable, affordable lodging and diversifying tourism offerings, Hengqin isn't just a backup; it's the engine of Macau's sustainable growth. Investors who act now will capitalize on a once-in-a-decade opportunity to profit from one of Asia's fastest-growing tourism corridors. The time to act is now.

Investment Thesis: Allocate 15–20% of your Asia-Pacific portfolio to Hengqin-linked equities and real estate. Target firms with existing Hengqin projects and exposure to policy-driven demand, such as SJM Resorts, Sands China, and infrastructure funds. The payoff? Long-term growth as Macau evolves from a gaming enclave to a world-class tourism destination.