Q&A | Lawrence Ho Melco, Crown’s CEO: ‘We steered away from the VIP market a long time ago’

” Our customers are climbing the consumption and sophistication ladder and we are there to help them.”

On the sidelines of the grand opening of the Hollywood-themed Studio City yesterday, the Times was one of the few media outlets that took part in an interview with Mr Lawrence Ho, co-chairman and chief executive officer of Melco Crown Entertainment Limited, to learn more about the vision behind the project and how it can redefine Macau as a truly international tourism destination.

Macau Daily Times – Melco Crown was the last of the six gaming concessionaries to enter the market, about five years behind the rest. Nevertheless, it is taking the lead in this new phase of Cotai development. Is that a way of making up for time lost in the early stages?
Lawrence Ho – I think it just shows that our company, our board of directors, James Packer and myself have confidence in the Macau market. We have done everything differently, every time the government asked for diversification we did not just take that and say ‘I’m just going to give you some crappy lazy river and a swimming pool and say it is diversification.’ We do not do that. We really take it to the heart and say, ‘we are going to follow that’. And to be honest I really enjoy doing things like that because it is fun! And although I am not a gambler I like the fun stuff. The casino and the revenue helps us to facilitate building up these things. As I have said many times before, “House of Dancing Water” will never make any money, it is just not going to pay back the investment of 250 million dollars and without the casino it would never be there. But at the same time, our heart is really in supporting the government. We also believe that what we do is at a point of differentiation because a casino is a homogeneous product, every casino is the same, what we are really trying to sell is the experience and the emotion.
MDT – Is Studio City the first sample of what the future of entertainment will be like in Macau?
LH – We sure hope so! This is a very different property unlike anything in the world so it is an experiment, but we were willing to try it and our board [of directors] was very supportive about the overall direction [we are heading in].
MDT – We have already heard that you will target the “mass market” in every sense with this new property. We know what the current situation is but will this property be able to adjust itself for the future, whatever that will be?
LH – We always build for the future! If you look at City of Dreams it has been open for six years and in that case we really built for the future, unlike some of our competitors that just “replicate something from Las Vegas or a part of the world and build it here”. The Chinese consumers nowadays have been to see the “real thing”; they have been to Paris, they have been to London, the have been to New York. Why would they want to come to Macau to see the “fake thing”, it’s degrading and it’s insulting to Chinese people to do what some of our competitors do. We want to bring the “World’s First”; world’s first Batman ride, the world’s tallest figure eight ferris wheel. Above all, we want to respect our customers, we want to say, ‘we know you have travelled the world but look: this is really cool and you have never seen it anywhere else’. That is what we want; to put Macau as a world leader in entertainment.
And people will adjust to it, the same way they did when we first built City of Dreams in a minimalistic, contemporary and luxurious style. People around us kept saying, ‘they like gold and they like white marble’ but now we are the leader in ‘premium mass’, the most sophisticated level of customer. They did not just like it, they gradually learned to love it and that is part of our job as well. Our customers are climbing the consumption and sophistication ladder and we are there to help them.
MDT – Is Studio City going to be Cotai’s ‘main attraction’?
LH – I think so. This is so new and so unique in the fact that there are more attractions here than there are at probably all of the other integrated resorts combined, and we deliberately did something totally different from City of Dreams because I like to do things differently each time. City of Dreams is about land-based entertainment and live shows, here [at Studio City] it is all about interactive entertainment that people can enjoy with their family.
MDT – Studio City asked the government for 400 gaming tables. You only got 250 and all mass-market. What is your feeling about that?
LH – We steered away from the VIP market a long time ago. I think we are the second least reliant on VIP customers out of the six concessionaires. The VIP contribution to our overall group, even before Studio City, was less than 10% so that is not that important to us at the moment. We all understand table caps and annual growth, so we understand why the government did that. Even if we had got the 400 tables, the percentage of VIP would be minimal so we are where we are and we are happy with it. Ultimately we have been the biggest supporter of the “mass business”.  RM