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Global News
US hotels, casinos eye overseas risk, rewards
US hoteliers and casino operators have set their sights on expanding overseas,
particularly in Asia, but opinions differ on which sectors present the least
economic and political risk. Hilton Hotels Corp is targeting India and China
as it reaches further outside the United States, following the acquisition last
year of its international namesake.
"The international business is better than we thought. It's the single
best opportunity I've seen in my 25 years in the business," Matthew Hart,
Hilton's chief operating officer, said at the Reuters Hotels and Casinos 2007
Summit in Los Angeles.
Beverly Hills, California-based Hilton has formed a venture - in which it owns
26 per cent - with Indian property firm DLF to develop 75 mid-tier hotels in
India. The company also reached a deal in December to develop more than 20 hotels
in China.
"In a lot of these markets there's a fairly well developed luxury market
and a fairly well developed guest house market, and very little in between,"
Hart said. Competitor Starwood Hotels & Resorts Worldwide Inc, however,
sees the most overseas potential in luxury brands.
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The international business is better
than we thought. It's the single best opportunity I've seen in my 25 years
in the business," Matthew Hart, Hilton's chief operating officer,
said at the Reuters Hotels and Casinos 2007 Summit in Los Angeles
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"Outside the US, clearly the near-term opportunities I believe remain
in what I would call the high end," said Starwood chief financial officer
Vasant Prabhu. Casinos, buoyed by the strong performance of luxury resorts in
Las Vegas, are also betting they can recreate that success in Asian markets,
including the Chinese gambling enclave of Macau.
Las Vegas Sands Inc opened Macau's first Las Vegas-style casino in 2004, and
will open its Venetian Macau resort late this year. Sands COO William Weidner
said China needs foreign investment, but money will not come if the government
does something that scares investors away.
There is some question about whether the government would choose to apply its
real estate tax to Sands' planned development of Hengqin Island, located off
China's southern coast. "All I can tell you is that we got a very good
reception from them. They very much want our expertise," Weidner said.
Terrence Lanni, chief executive of MGM Mirage Inc, also said it is in China's
interest to encourage investment. "When you introduce a nation of 1.3 billion
to capitalism ... it is very difficult to turn back," he said.
Lanni said he thinks that with its management of Hong Kong and Macau, China's
Communist government has sent a message to the people of Taiwan. suspect at
some point they will be more unified than they are now," the MGM CEO said.
Lanni said MGM, which is developing Macau properties under a joint venture with
Hong Kong conglomerate executive Pansy Ho, will consider more projects in Macau,
including nongambling developments. The company is still awaiting approval of
its Macau joint venture from Nevada and New Jersey regulators. "The issue
is how much control there is from her father, who regulators in New Jersey and
Nevada don't care for," Lanni told Reuters. Lanni referred to casino mogul
Stanley Ho, who held a monopoly on Macau gambling until the Chinese government
began allowing outside investors in 2002.
"I believe she (Pansy Ho) is independent," Lanni said.
- Reuters
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