Inside Asian Gaming

Oct 2007 | INSIDE ASIAN GAMING 21 ming pool. Media reports from Vietnam say the resort will also have a 200-acre golf course designed by former world number one golfer Greg Norman.The first phase, said to cost US$500 million and due for comple- tion in late 2009, will have 77,500 sq. ft for gaming. Paul Steelman Design Group—the Las Vegas-based consultants that worked on Sands Macao and Macao Studio City—have been hired to work with Canadian company Asian Coast Development Ltd (ACDL) on the project. ACDL’s partners in the consortium are Turnberry Associates and Fontainebleau Developments.ACDL says it has also retained former Sands President Al Luciani and the former CFO of Mandalay Resort Group Glenn Schaeffer as advisers on the scheme. Spending power Billions of dollars are also being poured into building large-scale integrated resorts in Macau and Singapore. In Macau, which has a history of legal gaming dating back to the 1850s, the IR format is likely to put ex- tra commercial pressure on the traditional gaming halls,many of which have previously relied on the VIP trade for the bulk of their revenues. Access to scale and wide product mix looks likely to be increasingly important for operators if, as forecast by many invest- ment analysts, the IR model takes off in Asia. A few operators are certainly placing large bets on this play. Deutsche Bank’s Aun-Ling Chia and Kar- en Tang say in their latest report Asian gam- ing: Big is better that by 2010 an estimated US$33 billion will have been invested in just three Asian casino jurisdictions—Macau, Singapore and Malaysia—amounting to roughly 30 mid- to large-size casino resorts, at an average cost of more than US$1 bil- lion each. The report says: “Of the budgeted capex, roughly 72%-75% or US$24 billion is to be invested in Macau. Las Vegas Sands is pumping in US$10.4 billion to build out The Venetian Macao. Melco and Publishing and Broadcasting Ltd are next in line, com- mitting US$5.8bn to construct new proper- ties, including City of Dreams on Cotai. SJM & partners would require another US$3.4 billion to fund their project pipeline. Includ- ing its investment in Singapore, Las Vegas Sands’ capex plan amounted to US$14 bil- lion, almost 44% of the total capex budget in this region.” The evolution begins According to CLSA analyst Gavin Ho: “While a typical property on the Las Vegas Strip would offer a variety of activities and choices beyond gambling and lodging (including fine dining, entertainment and shows, golf, spa and other resort activities), the basics are almost all that the Macau properties have on offer presently. An aver- age visitor will spend 3.5 nights during a trip to Las Vegas; while more than 50% of Macau visitors are same-day travelers, and report an average stay of 1.2 nights per visit.” This will change with the arrival of The Venetian Macao and other mega resorts, which will draw a more diversified visitor demographic to the city. Conventions will play a key role in moving Macau towards the Vegas model, with LVS Chairman Sheldon Adelson renowned for his prowess in the field.“It’s another key thrust in the historical development of Las Vegas is the convention business. This complements the vacation and holiday travel and helps fill the rooms during weekdays and of course the casinos and other entertainment venues at night. Macau’s coming integrated resorts will nar- row the hotel occupancy gap between Macau (about 70%) and Las Vegas (about 90%), with convention and entertainment adding to the value proposition,” adds Ho. Meanwhile,visitors will increasingly flock to Macau for the entertainment. According Rendering of the planned Ho Tram Strip