Experience is Everything
Galaxy Macau says it’s treating premium mass slot players like the electronic VIPs they really areFriday, 13 April 2012
Competition for Macau’s high-stakes slot players—those using bet denominations of HK$1 to HKS10 (US$1.29)—appears to be getting more intense. They are an important and profitable group to have as customers. High-stakes slot users account in some casinos for 60% or more of total slot revenue, according to industry sources.
That was reflected by the launch, in late March, of The Pavilion High Limit Slots at Galaxy Macau—described by management as a “by-invitation-only” facility. Previously, Galaxy Macau’s high-limit slots area was open to anyone who bet the minimum level required. Whether the introduction of an invitation policy will move the needle in terms of slot revenue growth will show over time. But it’s a common human trait to want to belong to a club that by definition excludes someone else. Galaxy’s move follows the opening in December of a new mass-market high-limit area at the neighbouring Venetian Macao, including a 5,000-square-foot highlimit slot section.
All casino marketing all over the world is about segmentation of players and rewarding them in different ways depending on their level of contribution to the bottom line. That’s the science. The “art” part in casino marketing is to package the reward as an experience—and one that’s distinct from the competition.
Galaxy Entertainment Group (GEG), the owner and operator of Galaxy Macau, believes it is doing something different for Macau players with its The Pavilion High Limit Slots. This is to give what are effectively premium mass players the level of service they could expect in VIP table gaming rooms. That includes being able to order food from any restaurant in the resort and having it brought to the machine, and having the option of private gaming salons and private relaxation areas.
“We live today in the experience economy,” Michael Mecca, President & Chief Operating Officer of GEG told Inside Asian Gaming at the launch event.
“It’s not about providing products any more, it’s about providing a great experience for every guest at every tier that they would like to enjoy.
“We have 9,000 incredibly enthusiastic team members that each day serve our guests in a very personal, attentive, style. That’s what attracts our guests to us first and foremost—the people of Galaxy Entertainment. “
A popular noodle bar next to the main gaming floor has been sacrificed to make way for the new, private slots section, though Galaxy’s management says the noodle house will be coming back—in a different location. The Pavilion High Limit Slots is an extension of Galaxy Macau’s existing premium mass offer. Pavilion High Limit, Pavilion North and Pavilion South are the live table gaming part of Galaxy Macau’s premium mass offer.
Slot lovers who are already Gold, Platinum or Black members of Galaxy’s Privilege Rewards Club because of the amount they drop per visit are the sort of people who can expect an invitation to The Pavilion High Limit Slots.
“When we look at the database we know there are certain people that are prequalified to be Pavilion [slots] members,” says Raymond Yap, Galaxy’s Senior Vice President, International Premium Market Development—a job description particularly focused on mainland China
“The [Pavilion] area is segmented by the denomination of the machine. So mostly the machines start at HK$1, HK$5 and HK$10,” adds Mr Yap.
These are modest denominations compared to minimum bets on live massmarket table games, which can go as high as HK$300 dollars or more during peak periods. It’s difficult therefore to label high denomination slot players as “VIPs” the overall Macau gaming context. But on modern slot games with 25, 50 or even 100 lines, such multiples add up to high stakes per game. And the pace of electronic game play is much faster than in live dealer games. Some of these premium mass slot players are dropping significant sums per session relative to their peers in the main mass slot segment.
“We live today in the experience economy. It’s not about providing products any more, it’s about providing a great experience for every guest at every tier that they would like to enjoy.”
In many markets around the world, slot play is chiefly associated with the grind market and time on machine. But Macau reflects the fact that Chinese slots players and table players alike love volatility. As expected, Aristocrat’s best-performing games such as 5 Dragons and its more interactive cousin 5 Dragons Deluxe are popular with Pavilion players.
“The new generation of players are very much computer-savvy,” states Raymond Yap.
“You can see that from the way the slot machine is evolving into some sort of very interesting interactive game with a lot of entertainment elements inside. It’s like playing a computer game at home. So we think the computer-savvy generation is going to pick up slots as a form of entertainment.”
In the Macau table gaming context, “premium mass” normally indicates three things—higher betting stakes; slightly higher player reinvestment; and thus lower margins compared to main mass-market table gaming. That slight reduction in margin is compensated for by the betting volumes involved—just as with “true” VIP table gaming. But even with the slight reduction in margin, premium mass is still a more profitable business dollar for dollar than VIP.
And there are a lot more people eligible for the segment. That’s why everyone in the industry is chasing it.
Until the opening of Galaxy Macau’s Pavilion slot offer, it can be argued that Macau’s casino operators have in essence managed their high-end slot players as premium mass customers when it comes to denominations and drop, but glorified main mass customers when it comes to player comforts and rewards. The best that most high-stakes slot players have been able to hope for in terms of playing experience is a screened-off area, a slightly more comfortable chair and a better staffto- player ratio than on the noisy mass floor. Given that some of them are dropping tens of thousands of Hong Kong dollars per trip—a few even more—it’s not surprising some players would like a little more love and attention. It seems GEG has listened and is treating the top segment of premium mass slot players as the VIPs they undoubtedlyare—by judging them in the context of the slot market rather than in the context of the live table market.
“We believe we have the most innovative affinity programme in the casino resort industry,” explains Michael Mecca.
“There are more benefits, more varied benefits, more lifestyle benefits in our Privilege Club than any other club in the industry.”
The most obvious area of casino competition on slots visible to the public is the size and frequency of jackpots in the mass and VIP segments. When you have a relatively small number of VIP players in the first place—as compared to the mass market—those big players have a strong need to see big jackpots go off on a reasonably regular basis in order to keep coming back. This is another area where Galaxy Macau thinks it has an advantage over some of its rivals—both in the mass market and its new premium mass Pavilion offer.
Peter Johns, Vice President of Electronic Gaming at Galaxy Macau, told IAG at The Pavilion High Limit Slots launch: “As we speak, the Pavilion jackpot is HK$7 million. Other operators here in Macau might have a base jackpot of tens of millions of Hong Kong dollars open to all segments of players, but it might only go off once a decade. That’s fine if you want to churn through players. But if you want them to keep coming back then you need to offer them regular, good-size wins. The VIP players like to celebrate their wins. It’s quite a competitive thing among them. They also told us they wanted to have somewhere away from the main floor where they could relax. We’re responding to their needs and they seem to like it.”