IAG FEBRUARY 2016 - page 8

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FEBRUARY2016
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decrease in gaming revenue. At Mr Wong’s estimatedMOP$5,000
per visitor, Macauwould require some 24million additional visitors
to produce that lost revenue. On the other hand, Mr Cavender
estimates that for a major trip, China’s middle class consumers
could spend US$10,000 in Macau. At that rate of spending, 1.5
million visitorswouldmake up for last year’s fall in gaming revenue.
All of thatmoneywouldnot be spent ongaming, but somewouldgo
to segmentswithhigher profitmargins,most notably lodging.
“Mass market customers who are willing to spend at a
more premium rate than the previous low end mass that Macau
was accustomed to will be key moving forward,” Hogo Digital
Managing Director Chris Wieners says. “It will become a volume
game – and I believe it’s a game Macau can win. Considering
China’s middle class and the growth potential over the next five
years, any anomalies withstanding, and the fact that the majority
of the Chinesemiddle class have never stepped foot inMacau, the
destination has potential to become the destination of choice for
Chinese consumers.”
Slower economic growth in China is having an impact on
spending, Mr Cavender, whose firm tracks mainland consumer
trends, says. “We are in an economic cycle where consumers are
still spending, but where they are being much more choosy about
how andwhere they spend.” The challenge is to get those potential
middle class visitors to chooseMacau.
PRICEDRIGHT
Some believe there’s an affordability factor keeping middle class
visitors away, but experts disagree. Macau is “totally affordable,”
Mr Wong says. “Most of the entertainment and dining options
are affordable.” The exception is accommodation during high
Cover Story
Galaxy’s
Broadway
getsmixedreviews
Galaxy Entertainment Group spent HK$5 billion
(US$644million) to remakeGrandWaldo intoBroadwayMacauas a
middlemarket compliment topredominantlyhighendGalaxyMacau
next door. With the lowest hotel rates in Cotai, a 3,000 seat arena,
intimate casino plusMacau-centric retail and casual dining options
in a street festival setting, “Broadway Macau is a mass market
dream,” Hogo Digital Managing Director ChrisWieners says. Eight
months after raising the curtain along with Galaxy Macau Phase 2,
thisBroadway isn’t yet a runaway hit.
BroadwayHotel has “almost 100%” occupancy for its 320 rooms,
aGalaxyspokesperson reports.Room ratesstartingaroundMOP$800
(US$100) includeaccess toGalaxy’ssignatureGrandResortDeckwith
itswave pool and river rides. The arena, filling aniche betweenSands
China’s 1,700 seat Venetian Theatre and Melco Crown’s 5,000 seat
venueat StudioCity, hashosteda varietyof shows.
Overall, Broadway attracts between 8,000 and 14,000 visitors
daily.Galaxysays55%of visitorspatronize itsF&Bofferings, featuring
Macau specialties along with retailers of local food souvenirs with
amobile stage and busker style entertainment. Studio City features
a similar food concept, Macau Gourmet Walk, though it’s located
indoors, a level above the shoppingmall and includes international
chains. The Macau government has made support for local small
andmedium enterprises a criterion for allocating additional gaming
tables, and it could also become a factor in awarding gaming
concessions, whichwill start to expire in 2020.
The question lingers whether Macau themed F&B is a winning
concept for tourists or amarket “distortion” created by government
policy that GamePlan Consulting founder Sudhir Kale warned
about at November’s Macao Gaming Show. Institute for Tourism
By
MuhammadCohen
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