IAG 2006-04-05 - Apr- May - page 20-21

19
18
nSeptember,LasVegas-basedWynnRe-
sorts will openWynnMacau, the company’s
first property in the city, and plans to com-
plete an expansion by the first half of 2007,
bringing the total project cost to over US$1
billion.WynnMacauwill trumpet itself as the
city’sfirst full-fledgedVegas-styledestination
resort. LasVegas Sands Corp (LVS) Chairman
SheldonAdelson says“that’sa joke.”
Admittedly, Wynn Macau will pale in
comparison to LVS’ ambitious US$2.3 billion
Venetian Macau, set to open in mid-2007,
and even toWynnResorts’flagshipproperty
inLasVegas.WynnMacauwill have600hotel
rooms vs. the3,000 suites atVenetianMacau
andthe2,716roomsatWynnLasVegas.Vene-
tianMacauwill have awhopping 1.2million
sq. feet of convention and exhibition space,
compared to 24,000 square feet of meeting
space at Wynn Macau. Wynn Macau’s 13-
store retail mall will be dwarfedbyVenetian
Macau’s 350-store shopping mall, and the
former’s600-seat theatre is a triflecompared
to the latter’s 1,800-seat showroom and
15,000-seat stadium.
WynnMacau is clearly focusedon its ca-
sino,whichwillhouse200gaming tablesand
380 slotmachinesatopening,and500 tables
and 980 slots after the expansion. Mr. Adel-
son says Venetian Macau will be Asia’s first
real destination resort, with its integrated
expo, entertainment, shopping and dining
offering.“Oh,andwe’ll havea casinoaswell,”
he says, stressing the move away fromMa-
cau’s previous casino-centric properties. Still,
VenetianMacau’s casinowill be the biggest
in theworld,with 750 tables and 4,000 slots
at opening, and covering almost three times
the floor area of the casino at the expanded
WynnMacau.
Whence Came Vegas
Many look to Las Vegas’ evolution to prog-
nosticatewhereMacau isheading.Gambling
was legalized in Nevada in 1931, andVegas’
first transformative product was the casino
resort, which took over from the erstwhile
Aheadof thePack
“It’s toomuch too soon,” charge detractors of Las Vegas SandsCorp (LVS),
which is set to open itsUS$2.3billionVenetianMacau resort inmid-2007.
LVSChairmanSheldonAdelson argues other casino and resort operators,
including his old rival SteveWynn, will offer “too little too late” in the city
downtown gambling joints – the first resort
wasEl Rancho.Theboom incasino resortde-
velopment in theearly ‘50swas followedbya
period of consolidation, duringwhich some
operators sought todevelop the convention
market inorder todrivemid-week occupan-
cy. Properties began marketing themselves
as resorts and business meeting venues,
rather than places centered on casinos. This
heralded thedawnof themega-resorts.
The mega-resorts’ diversified offerings
have pushed up the Las Vegas Strip’s non-
gaming revenues, which last year totaled
US$9.5billion, compared togaming revenue
of US$6.2 billion.Macau granted its first ca-
sino license in 1937 – just six years after Ve-
gas did – but the monopoly which lasted
until 2002 has stymied Macau’s diversifica-
tion from hardcore gambling until now, and
90-95%of revenue is still derived fromgam-
ing.As CLSA’s Aaron Fischer discussed in the
last issueof InsideAsianGaming, thegrowth
of Macau’s non-gaming revenue “will be the
moreexciting sideof the race.”
Mr. Adelson views casino-centric prop-
erties from rival operators set to open on or
nearMacau’sFriendshipAvenue–whereLVS’
SandsMacau and StanleyHo’s flagshipCasi-
noLisboanow stand—as“too little too late.”
These includeGalaxyStarworld,WynnMacau,
Grand Lisboa, MGM Grand Macau and PBL-
Melco’s CrownMacau (just across thebridge
on Taipa). “All they can do is address the lo-
cal market,” says Mr. Adelson, though given
the boom ingaming revenue, thatmarket is
nothing to sneeze at.Mr.Adelson feels, how-
ever, that“they shouldhaveopened twoand
ahalf yearsago,whenwe saw themarket,we
came in andwe addressed themarket [with
SandsMacau].”
NinemonthsafterWynnMacauopens,LVS
will make the first dramatic push in the non-
gaming race on the Cotai Strip, and its “near-
est competitor from LasVegas”will remain at
least two and a half years behind, according
to Mr. Adelson. The Cotai Strip of reclaimed
land between Taipa and Coloane Islands is
where LVS is spearheading the creationof its
trademarked“Asia’s LasVegas”by developing
a string of luxurious hotels around Venetian
Macauwithworld-class convention andexhi-
bition, retail, entertainment and dining facili-
ties.Andoh, itwillhavecasinosaswell.
The casino-centric properties opening
over thenext two yearswill go afterMacau’s
provenmarket of day-trippers luredbygam-
bling. Fewer than 20% of visitors to Macau
currently stay overnight in a hotel or simi-
lar establishment, with three- and four-star
establishments the most popular, hosting
70%of the total.Mostof thevisitorsare from
mainland China, and skeptics fear they do
not yet have sufficient appetite for high-end
non-gaming offerings, including rooms at
the glitzy resorts. Given the current market,
doomsayers presage low occupancy at the
new resorts as room supply triples over the
next two years.Mr. Adelson offers the skep-
ticsa terse reply:“Forget theoldmarket,it’s ir-
relevant.”It is thenew,“multi-nightovernight
staymarket thatwill fill the [Cotai] Strip.”
Visitors toMacau currently stay an aver-
ageof 1.1days, though LVS sees potential to
raise that figure closer toHong Kong’s aver-
age3.4days.Packages for longer stayswillbe
marketed around the newmega-resorts.Mr.
Adelsonclaims“we’re in theprocessofestab-
lishinganetwork,andwedohaveanetwork
of tour operators standing in linewaiting to
get allocationsof rooms to send theirpeople
to.It’sanotherveryexcitingproduct for them.
They seewhat tour operators havedonego-
ing toVegas, and so they see this as a great
productoffering.”
I
TheCotai Strip
1...,2-3,4-5,6-7,8-9,10-11,12-13,14-15,16-17,18-19 22-23,24-25,26-27,28-29,30-31,32-33,34-35,36-37,38-39,40-41,...52
Powered by FlippingBook