Scholars: Macau can still learn from Vegas without replicating it

Gaming jurisdictions worldwide, including Macau, can still learn from the vast experience in Las Vegas, but to merely replicate its concept might not be the best solution. Instead, scholars Carlos Siu Lam, from the Macau Polytechnic Institute, and John Crossley, from Florida State University, suggest that gaming jurisdictions should focus on what makes them unique.
In a paper published in the latest issue of the Journal of Tourism Insights the two scholars looked at how entertainment events and festivals can help diversify gaming jurisdictions’ tourism offerings, comparing approaches in Macau and Las Vegas.
“Efforts should be dedicated to creating a unique image and destination experience for Macau under the current resource constraints rather than simply imitating Las Vegas. Offering different kinds of products is a key aspect in this regard,” it reads. According to the authors, it is crucial for Macau to differentiate its products from those of other gaming jurisdictions.
While the American city is still seen as one of the top gaming destinations worldwide, Crossley and Carlos Siu believe that because tourism markets vary worldwide, other jurisdictions should consider what can best suit their own interests and circumstances.
“Policy makers should not jump to the conclusion that their gaming jurisdictions can solve their marketing problems by simply replicating the Las Vegas concept,” they stressed.
The scholars suggest that Macau should broaden its product portfolio, while marketing its gaming offerings to a wider audience. The second measure would help minimize the volatility of gaming demand.
“By restructuring its customer mix, gaming jurisdictions may have a more balanced and sustainable tourism and casino industry,” the paper reads.
Although the scholars acknowledge that Macau has developed some first-class events, they say it is still lagging behind Vegas in both “quantity and diversity.”
Even though Macau’s gaming revenue was last year about seven times that of Las Vegas, Nevada’s capital city continues to be regarded as one of the world’s largest gaming hubs.
In Vegas, entertainment and recreation events were progressively added alongside gaming, in the hope of attracting a wider audience. It worked.
“Compared to Las Vegas, with its long list of shows, festivals, events and other leisure activities, Macau is a neophyte in tourism destination attraction variety and volume,” the paper reads.
Data gathered by the scholars confirms that Las Vegas clearly shows its superiority over Macau in categories such as the number of visitors, length of stay, spending and lodging, food, transportation, as well as shows and sightseeing activities.
Figures collected between 2009 and 2012, shown in the study, indicate that 47 percent of Las Vegas visitors chose the city for vacation and leisure, while 16 percent travelled on business trips, 14 percent went to visit relatives or friends, and 8 percent headed to Nevada’s capital purely to gamble.
In Macau, data for the same period shows that 61 percent of visitors came on vacation, four percent were here on business matters (including convention and exhibition events), seven percent traveled to MSAR to visit friends and relatives, while 9 percent were in town to gamble. 19 percent of visitors to Macau came for a variety of reasons apart from those already listed.
Between 2009 and 2012, the proportion of people traveling to Macau primarily for gambling increased from eight to nine percent. In Vegas this number fell from 13 percent to eight.
Although visitors’ main reasons for travelling to Macau appear more diverse, gambling plays a major role in generating revenue.
The study’s findings confirm what has long been said about Macau’s tourism industry: “[it] relies heavily on gaming, while Las Vegas markets and revenues are more diversified.”
“Macau’s clientele base is narrow, relying heavily on the two close-by markets: China and Hong Kong,” the authors added.
Indeed, the scholars say that Macau is also facing competition, as neighboring regions legalize gaming and begin to offer a wide range of entertainment activities.
They recalled that Singapore, South Korea and Taiwan, among others, ranked ahead of China in the rankings of Travel and Tourism Competitiveness for Asian countries.
Crossley and Carlos Siu believe that because gambling is illegal in mainland China and Hong Kong, Macau’s success has so far relied on its “border-location strategy”.
However, they warned: “This comparative advantage will start to erode in the future as more regional destinations are expanding their gaming industry.”
Still, they point out that over a billion people reside within a two-
hour flight of Macau, with three-fifths of the world’s population within a five-hour flight, which represents “a massive potential source market” for MSAR.
The length of visitor stay is another issue that needs to be addressed. In an article published by the Times last March, another US scholar conducting research on both similarities and differences between Las Vegas and Macau emphasized findings on visitors’ intentions and their will to return.
Kate Price-Howard, who holds a PhD in Parks, Recreation and Tourism from the University of Utah, observed that in Las Vegas the non-gaming component makes up a large part of revenue. She believes the non-gaming activities that the city offers have led visitors to spend more time in Vegas.
In Macau, however, most tourists visit for only one day.
Carlos Siu, who has also co-written a research paper on the average length of stay in Las Vegas, told the Times that the average stay is around five nights. Furthermore, he found that visitors spent ten times less on gambling in Vegas than in Macau.
Regarding what could be done in Macau to increase the length of visitors’ stay, Kate Price-Howard recalled the advantageous effects of widespread promotions in Vegas. Hotels in the city often introduce a minimum number of nights per stay for visitors.
Other tactics used include discounts on shows, tickets, and free meals, which might make visitors think of “Sin City” as an inexpensive destination.