Grant Govertsen (right) and William Scott (left)
Conducting market research and catering specifically to customers in a particular jurisdiction is key to the further development of the non-gaming segment, casino resort executives acknowledged at a panel discussion titled “Asian Tourism: Gaming Leads the Way,” which was held at G2E Asia (Global Gaming Expo) yesterday.
Casino executives from Las Vegas Sands Corp., Studio City Macau and Solaire Resort looked into the success of the integrated resort model and how amenities are being structured around gaming. At a panel session moderated by David Rittvo from The Innovation Group, representatives of the leading operators elaborated on factors crucial to the casino resorts’ success.
Andrew MacDonald, Corporate Senior Vice President and Chief Casino Officer of Las Vegas Sands Corp., recalled that MICE has been vital to the company’s success: “From our perspective, MICE is critical in any jurisdiction,” he stated.
Nevertheless, Mr MacDonald stressed that market research is equally important in order to make sure that the non-gaming components, and other amenities in place, fit the requirements of the current market. He believes that having a comprehensive understanding of the market will assist operators in finding what best suits the jurisdiction in question, be it Manila, Singapore, Japan or Macau.
In Macau, casino operators are currently under pressure to step up their efforts to provide further non-gaming elements in their resorts, as gaming concession contracts will soon be reviewed. The central government has also made it clear that it wants Macau to diversify its economy.
Thomas Arasi, president and Chief Operating Officer of Solaire Resort and Casino, located in Manila, acknowledged that “it doesn’t really matter what we think. Governments that give these treasured gaming licenses are requiring us to do that [offer more non-gaming components].”
However, he stressed that developing non-gaming amenities is no easy task when high numbers of visitors continue to fly to a particular destination mostly just to gamble. “It’s very hard for non-gaming industries to make a lot of money if people don’t fly to your destination for purposes other than gaming,” he reiterated.
He also, however, pointed out, “If we look at Las Vegas, there are a lot of people whose primary reason for flying there is not the gaming [sector] (…) In Singapore, they are also making a lot of money with non-gaming.”
JD Clayton, president of Studio City Macau, Melco Crown Entertainment’s new development due to open in Cotai later this year, also acknowledged the need to “broaden the scope of products” currently being offered by operators. But he too thinks that it is crucial to cater specifically to the kind of customer who usually visits Macau.
At the same time, it is essential that operators provide the usual non-gaming elements in a special way, so as to give visitors a different experience, he said, recalling, for instance, the company’s retail strategy. “We are building something at Studio City where we are virtually transporting shoppers to different shopping destinations – New York, Hollywood, Beverly Hills – and it’s all through a virtual experience,” he stated, adding that the company is trying to create an environment around shopping to really make it a different experience.
The G2E Asia, which this year has gathered about 9,000 attendees, comes to an end today. The event is organized by Reed Exhibitions and the American Gaming Association. A total of 180 exhibitors have been displaying their gaming products and services, while industry experts have been discussing the future of gaming.
VIP segment ‘changed permanently’
MGM Resorts senior executive William Scott believes that Macau’s VIP segment “has changed permanently,” following China’s anti-corruption campaign. “It may be years before we go back to where we were. But from the mass market it’s not so bad. We see a pretty healthy mass segment,” Mr Scott said yesterday when delivering his keynote address at the Global Gaming Expo (G2E Asia).
Mr Scott served as executive vice president of corporate strategy and special counsel at MGM Resorts and is currently the executive director and general manager of Diaoyutai MGM Hospitality, which operates luxury hotels in mainland China.
The senior executive stressed that the VIP gaming market changed with China’s anti-corruption drive, and he does not expect “there will be an immediate turn.”
“It’s the Chinese customers’ attitude that’s changed. It’s not a good time to show off your wealth. It makes sense to be a little bit more reserved,” he acknowledged, adding that this might benefit other jurisdictions such as Las Vegas or South Korea.
MGM Resorts ‘would like to increase its stake’ in Macau
MGM Resorts’ senior executive, Willing Scott, has hinted that reducing or selling off the company’s interest in MGM China Holdings Ltd would be a bad idea. Mr Scott, who currently holds the positions of executive director and general manager of Diaoyutai MGM Hospitality, told reporters yesterday, “We would like to make broader investments [in MGM Macau].”
On the sidelines of a G2E Asia keynote address, when asked whether MGM Resorts would consider selling down or selling off its 51-percent stake in MGM China Holdings, he stated: “Your question is would we consider it? And the answer is yes. Of course we consider all ideas. But some ideas are not good ideas and selling down the interest we have in Macau (…) I think the reverse would be true. MGM would like to increase its stake.”
He reiterated, “We would like to make broader investments. But would we consider it? Sure. We would consider it because we consider all ideas.”
Mr Scott, who also served as executive vice president of corporate strategy and special counsel at MGM Resorts International, recalled: “The question I was asked this morning was, ‘Is MGM committed to this market?’ Yes, we are abundantly committed to this market. We’re spending USD3 billion on a resort next door [in Cotai].”
MGM China Holdings Ltd owns and operates the MGM Macau, which is now building the MGM Cotai. Mr Scott said yesterday that the construction works “are pretty far along and on schedule.” The resort is due to open late next year. He added that the new development will entail “a substantial retail component.”
Last year, MGM Resorts revealed its plan to build a resort in Japan, should gambling be legalized there. Bloomberg reported that MGM Resorts International had said it was ready to spend between USD5-10 billion in Japan. CP
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