11 George Tanasijevich
President and CEO
Marina Bay Sands
Marina Bay Sands is an instantly recognizable structure that has come to define the Singapore skyline since its April 2010 opening. It is also probably the world’s most profitable casino, though growth is proving hard to come by given the tough regulatory environment. Still, operating income in the second quarter of 2013 rose 8.4% year on year to US$255.1 million, with adjusted EBITDA up 7.5% to $355.3 million on a 6.4% increase in net revenue to $739.5 million.
Revenues at both MBS and its duopoly-market rival Resorts World Sentosa are buffeted by volatility in VIP win rate caused by their reliance on a relatively small number of high rollers, the result of Singapore’s effective ban on junkets. MBS works on an expected longterm theoretical VIP win rate of 2.85% but achieved only 2.53% in the second quarter, a 0.11 percentage point erosion from the year-ago period. The deviation from theoretical VIP win rate at MBS is exacerbated by the property’s policy of taking bets up to S$1 million, though that policy also appears to be helping boost VIP volume, which rose 24.9% year on year in the second quarter to US$14.4 billion.
Sentosa had led the market in its formative period, thanks to a twomonth opening head start and a good deal more local knowledge and connections, derived mainly from parent company Genting’s longstanding casino monopoly in neighboring Malaysia. MBS parent Las Vegas Sands, on the other hand, had a steeper learning curve. Though the company had already gone through a tough but enlightening Asiaacclimatization process with Sands Macao and The Venetian Macao, those lessons did not always serve it well in Singapore. The most notable rookie mistake the company committed on arriving in the Lion City was transposing its Macau games mix to MBS. Unlike in Macau, where baccarat reigns supreme, roulette is dominant in Malaysia and Singapore, and the MBS main floor initially devoted too much precious space to card tables and too little to ones with wheels. But MBS soon spotted its mistake and moved quickly to reconfigure. The market responded in kind, revenue spiked, and LVS started getting better acquainted with local tastes. MBS overtook its rival by Q2 2011 and hasn’t looked back.
That’s able management, and the team at Marina Bay Sands, led by George Tanasijevich, is one of the best in the region.
Mr Tanasijevich arrived in Singapore in 2005 as LVS employee No. 1 and spearheaded the company’s winning bid for the first integrated resort. An accomplished business executive and attorney with extensive international experience, he was the perfect choice for the job. He’d been based in Macau up to that point, responsible for the coordination of various commercial activities related to LVS’ Cotai Strip projects. But having at one time held a senior position at Singapore’s CapitaLand, Southeast Asia’s largest real estate and hospitality conglomerate, he had an insider’s knowledge of the market. Sands President and COO Michael Leven credits him with being “instrumental” in securing the tender.
“Throughout Marina Bay Sands’ construction and opening phases, George continued to impress us with his sharp business and legal mind, familiarity with the operating framework in Singapore, and reassuring presence,” Mr Leven has said. “He has been a steady and strong force for the company since Day 1, and we are proud to have him lead Marina Bay Sands to even greater heights.”
Mr Tanasijevich also serves as managing director of Global Development for LVS, working to secure opportunities to keep the company expanding at the heady rates it has experienced over the past decade through its forays into Macau and Singapore.
12 Tan Hee Teck
President and COO
Resorts World Sentosa
Resorts World Sentosa appears to have found itself firmly in the doldrums.
Its revenue in the first half of 2013 contracted 7.5% year on year to S$1.38 billion (US$1.07 billion), while adjusted EBITDA slid 18.7% to $560.5 million.
Underlying the poor performance is the confluence of a market that has already reached relative penetration and an unfavorable regulatory environment imposed by the Singapore government, from the casino entry levy on residents and injunctions on marketing to locals, to the effective ban on junkets and restriction on gaming capacity expansion.
RWS was also hit by bad luck in the VIP segment. Although rolling chip volume had grown 34% in the first half, the VIP win rate fell to 2.3%, having stood above 3% in the same period last year. This highlights the danger of the reliance of both Singapore integrated resorts on a relatively small number of high rollers, which leads to greater volatility.
The reason for the limited supply, of course, is that Macau-style junkets are barred from plying their trade in the Lion City. The junkets currently active in Macau would gladly work with Singapore’s casinos in order to offer their clientele a greater choice of venue and also to partake in the potentially greater incentives enabled by the city-state’s much lower tax rate on VIP play—12% (which includes 5% on the gross and 7% goods and services tax) versus 40% on the gross in Macau. But the government, understandably wary of junkets and their reputed links to Chinese organized crime groups, has chosen to keep them out. Singapore’s fastidious Casino Regulatory Authority has so far licensed only three junkets, none of them active in Macau or apparently involved in any of the traditional junket activities beyond marketing to players. Known locally as “international marketing agents,” the three approved groups all work exclusively with RWS, and by most accounts do not bring in much business.
Even without junkets, however, mainland Chinese players account for about half the rolling chip volume in the city-state. Not surprisingly, this has led as well to the IRs being saddled with relatively high impairment charges and provisions for bad debts. RWS saw a 13.7% year-on-year increase in its impairment loss on receivables to S$77.1 million in the first half.
The government has not given any indication that it will loosen restrictions on junket operators, and if anything is scheduled to impose stricter regulations. It is also expanding its limits on mass-market advertising. That does not bode well for RWS, which registered a mere 1% year-onyear growth in mass revenue in the first half.
Last month, Singapore extended restrictions on casino advertising to include promotional activities surrounding membership campaigns and loyalty club programs. The rules, which previously applied only to advertisements, now require RWS and MBS to obtain prior approval from the Ministry of Community Development, Youth and Sports before launching such promotional campaigns and any mediarelated activities and sponsorships associated with them.
“The casinos are meant to be tourist products and should remain so,” said CDYS acting Minister Chan Chun Sing. “We are prepared to strengthen social safeguards as and when necessary to ensure that there is no targeting of our domestic market.”
Despite the bleak growth outlook, Tan Hee Teck stands at the helm of one of the most profitable casinos in the world, the jewel in the crown of Genting’s global operations.
Mr Tan was instrumental in helping RWS score its duopoly Singapore license in 2006, and from the property’s February 2010 opening, has worked to shore up its position in the market. He has more than 20 years’ experience in the leisure and gaming industries, having held various senior positions within the Genting group.
13 Angela Leong
Executive Director, SJM Holdings
Sociedade de Jogos de Macau
Angela Leong took some time this month from her campaign for re-election to a third term in Macau’s Legislative Assembly to rewrite the future of Macau’s largest casino operator. It came in the form of an announcement from SJM Holdings that she had agreed to transfer to SJM an interest in 18 hectares of land she controls adjoining the company’s Cotai location, effectively tripling its area. SJM’s was the smallest of the sites the government had awarded the six casino licensees in the booming resort district. With the stroke of her pen the company had gone from being Wynn Macau’s little next door neighbors to lords of a demesne where just about anything that money can build is possible.
It was, needless to say, a monumental deal, and Ms Leong’s position in it was unique because as an executive director of the company she held decision-making power on both ends, not to mention that as SJM Holding’s largest individual shareholder she stands to benefit in all kinds of ways.
Such is the power the youngest and last of Stanley Ho’s consorts wields in the largest casino market in the world—“Say Tai,” (“Fourth Wife”), as the venerable tycoon calls her after the traditional Cantonese manner.
She was one of the movers behind a joint venture recently announced with Gianni Versace to develop a HK$2.5 billion (US$322 million), 270-room Versace-branded hotel at the Cotai site. The famed Italian fashion house is hugely popular among China’s brandobsessed nouveau riche, and SJM’s will be only the third hotel in the world to carry its name. It is one of the unique features her land deal has made possible, and Ms Leong is said to have been its inspiration, the idea coming to her a decade ago when Palazzo Versace in Australia’s Gold Coast was her home away from home during the SARS epidemic. “We saw the Versace hotel was a beautiful, elegant, world-class hotel,” she said at the signing ceremony earlier this month, Donatella Versace by her side. “I thought it was 100 percent worth it to have such a hotel in Macau.”
One of south China’s wealthiest individuals, with a net worth estimated by Forbes at US$2.3 billion, her influence reaches into every facet of the SJM/STDM empire. She owns one of the largest personal equity stakes in STDM—the forerunner of SJM Holdings’ casino operating arm and the listed company’s majority shareholder— and serves as a director. She also controls 10% of the operating company, Sociedade de Jogos de Macau, and is its managing director. She is also vice chair of the Macau Jockey Club.
Her property holdings, described as “vast” by The Wall Street Journal, include a significant interest in L’Arc Macau, a 56-story colossus containing a hotel, private residences, retail shops and a 10,000-square-meter casino that operates as one of 14 independent “satellites” of SJM’s license.
A Guangzhou native, daughter of an army officer, a dancer by training, she’s been as quick a study as they come in the school of casino operations, the years she spent at Stanley Ho’s side having equipped her well to become a solid contributor to SJM’s growth in an increasingly competitive marketplace, reflected, in part, by the fact that for several years now she has headed the trade group representing the city’s junket operators and promoters.
Her impact on the civic and social life of the region has been similarly profound. She’s been the directly elected representative of a pro-casino coalition in the Legislative Assembly since 2005 and she holds a seat on the Jiangxi Provincial and Zhuhai Municipal committees of the Chinese People’s Political Consultative Conference. Her charity work includes a longstanding involvement with Po Leung Kuk, a 130-year-old institution founded in Hong Kong to provide services to needy women and girls.
14 Michael Mecca
President and COO
Galaxy Entertainment Group
Michael Mecca joined Galaxy Entertainment Group in March 2009 in the run-up to the opening of the US$2.1 billion Galaxy Macau resort on Cotai. His mission, said Deputy Chairman Francis Lui, was to take the company “to the next level in its development as a leading Asian gaming corporation”.
The central element of that mission was positioning what had until then been a primarily VIP-centric company with StarWorld Hotel and Casino on the Macau peninsula to serve the mass market on Cotai. And Galaxy Macau’s arrival in May 2011 could not have been timed better, coming just as China’s burgeoning middle class created a fundamental shift in the dynamics of the market away from VIP and toward the mass.
Play at Macau’s cash tables is now growing at around triple the rate of creditbased VIP play. Citywide, the mass market generated MOP55.6 billion ($6.95 billion) in revenue in the first half of 2013, having sustained year-on-year revenue growth of 30% or better for 10 straight quarters. The shift has also been revolutionizing industry profitability. As cash gambling is conducted directly between the player and the casino—no junket intermediaries and VIP room promoters to be cut in for 40-45% of the win—after-tax margins are around three to four times greater than on VIP.
A big part of Mr Mecca’s job, as he saw it, was to take the strong customer service standards established at StarWorld, the company’s previous flagship property, and transplant them to the much larger Galaxy Macau.
“StarWorld has always been one of the most prominent VIP casinos anywhere in the world,” he says, “and our responsibility at Galaxy Macau was to ensure we gave that same level of welcome and memorable experience as our VIPs have always enjoyed with us to our mass players and premiumdirect players.”
Mr Mecca and his team have succeeded in doing just that. As a result, Galaxy Macau’s steady gains in the mass market have outstripped those of its local rivals. In the first half of 2013, its mass table gaming revenue soared 45% year on year to HK$4.8 billion, while machine gaming revenue jumped 30% to $742 million. The property’s VIP business fared less well, with revenue up just 4% to $11.9 billion in the first half.
Mr Mecca stresses that in order to provide all guests with the coveted “World Class, Asian Heart” experience promised in its marketing campaigns, Galaxy Macau depends crucially on its 8,000 team members—the people who, in his words, “breathe life into the facility”.
“We spend a great deal of time and energy training our people, not just when they first join us—we have the dealers’ school and training classes when they join— but then on a regular, ongoing basis,” he says. “We have dedicated people in every department who spend their entire time on the floor, and there are impactful behaviors that we monitor that are all geared towards providing the required level of service. You’ll see that every one of the security guards, as you enter, they’ll make a motion of welcome. And the dealers, after each hand, they’ll look up at the customers and make sure everything is okay. Every department in the property participates in the program, and our goal is to provide a level of service second to none in the industry.”
Also integral to keeping Galaxy Macau’s employees motivated is the hands-on approach of GEG’s senior management. Mr Mecca is a fixture around the property.
“It’s about all of us being present,” he notes, “all of us participating with these young people, being out here supporting them every day and being on site with them. So they know that we’re out there too. We’re not hidden up there [in corporate offices], we’re out here with all of them, greeting the guests, supporting them and making sure they have all the tools that they need to get the job done.”
With the appointment in November of Gabriel Hunterton as deputy COO of Galaxy Macau, Mr Mecca has been able to focus more on the property’s secondphase expansion, the budget for which was recently raised by HK$3.6 billion to HK$19.6 billion (US$2.5 billion). The expansion, which is under way and slated for completion in 2015, will double the size of the resort, adding as many as 500 gaming tables and JW Marriott and Ritz-Carlton hotels with a total of 1,300 rooms.
Prior to joining GEG, Mr Mecca had served as president and CEO of Planet Hollywood Resort & Casino in Las Vegas and held senior executive roles at Mandalay Resort Group, Caesars World, Crown and Las Vegas locals giant Station Casinos. He has more than 30 years of experience in the hotel and gaming industries.
15 Linda Chen
Executive Director and COO
It’s been a challenging year for Wynn Macau, one that’s provided Linda Chen with ample opportunity to show why she’s one of the ablest managers in the market.
With gaming volumes down across the board in the first half and renovations under way on 600 rooms she’s had to run a tight ship at the only Mobil Five-Star resort in town. The happy result was a profit of HK$3.69 billion (US$473 million) for the six months ended 30th June, and the property’s Hong Kong-listed parent was able to declare a 50-cent dividend. This was achieved in the face of a decline in VIP turnover of almost 9%. Mass-market drop calculated in terms of chips purchased at the tables was down 5%. Slot handle was down almost 13%. It helped that the casino played luckier year on year both in the private rooms and on the main floor—total gaming revenues actually ended the period up 3.2% on H1 2012— but due weight must be given to some substantial increases that were realized in non-gaming revenues, 5.2% in aggregate, driven by a surge in hotel occupancy (+400 basis points) and a HK$50 million jump in retail revenue.
What’s most striking about all this, though, is that it was achieved even as the property pulled back on promotional allowances and other sales costs by more than $40 million, shaved 6% off its advertising spend and even found a way to raise salaries across the property.
But then Ms Chen’s confidence in her ability to leverage the brand rather than give in to the temptation to overpay for business has always been one of her defining characteristics. And she’s as adept as they come at managing risk. Casino receivables came in at 6% under where they stood in the first six months of 2012. The provision for doubtful accounts was up, but only by 2.2%.
Those in the know locally hold her in high regard as one of the principal reasons for this kind of keen competitiveness, especially at the high end of the market, a quiet force operating behind the scenes to skillfully manage key relationships and maintain corporate credibility.
She’s been similarly effective as an ambassador for the company in the region, serving as a member of the Nanjing Committee of the Chinese People’s Political Consultative Conference (Macau) and personally representing Steve Wynn in Beijing. She’s even been suggested at times as his possible successor.
Certainly she has no bigger fan than Mr Wynn himself. They go back a long way. She worked on the opening of The Mirage on the Las Vegas Strip in 1989 fresh out of Cornell’s prestigious School of Hotel Administration and was involved in the debut of the MGM Grand, which opened in 1993 as the largest hotel in the world. She was executivevice president of international marketing at Bellagio when Mirage Resorts was bought by MGM Grand (now MGM Resorts International), and for two years she headed up international marketing for MGM Mirage, as the merged companies were known at the time. She rejoined Mr Wynn during the run-up to Wynn Resorts’ Nasdaq listing and the opening of Wynn on the Strip. She came to Macau in 2002 after Wynn won its casino concession and was chief operating officer of Wynn Macau. She took on the same title with the listed parent and joined the board of directors when the property went public on the Hong Kong Stock Exchange in 2009. She also serves as president of Wynn Resorts’ Wynn International Marketing subsidiary.
Steve Wynn has referred to her as “a member of my family … virtually one of my own daughters,” and three years ago, hemade her one of the highest-paid executives in the industry, and the first woman to crack the top 10, with a 10-year contract that came with a US$10 million bonus, not counting stock and options.
16 Gabriel Hunterton
Deputy Chief Operating Officer
Gabe Hunterton knows the value of treating his customers well.
Until recently, Mr Hunterton served as COO of Galaxy Entertainment Group’s VIP-centric StarWorld Hotel and Casino on the Macau peninsula. Although StarWorld is disadvantaged by a modest plot size relative to its neighbors—including Wynn Macau, Grand Lisboa and MGM Macau— that limits the range of amenities it can offer, its steadfast commitment to offering high rollers convenience and exemplary service has allowed it to punch well above its weight, earning disproportionately large VIP baccarat revenue relative to its size and development cost—HK$3.4 billion (US$436 million).
Mr Hunterton was appointed to head StarWorld in December 2009, with a remit to “develop and refine” the property’s performance and prepare it for the impact of the opening of the far larger and betterappointed US$2.1 billion Galaxy Macau on Cotai, with the inevitable migration of some of StarWorld’s players there.
It’s a credit to Mr Hunterton that StarWorld didn’t miss a beat following Galaxy Macau’s May 2011 opening. He has now been given the bigger job of enhancing the performance of the already successful Galaxy Macau following his appointment as deputy COO of the property in November last year.
Mr Hunterton is charged with leading Galaxy Macau’s premium-mass strategy, which is distinguished by the company’s “VIP” approach to delivering service and rewards. Under his watch, in the first two quarters of 2013, Galaxy Macau has grown its share of citywide mass market and slot revenues, contributing to higher operating margins at GEG as it moves steadily away from its previous dependence on the lowmargin VIP trade.
“We’ve got a lot of chances to be right with the customers,” says Mr Hunterton of the company’s efforts to court the prized premium mass. “We do our best to offer the customer the best possible experience. But at the end of the day, it’s their decision. If they enjoy the trip then we’ve been successful. If they don’t enjoy the trip then we’ve failed.”
While growing mass revenue, Mr Hunterton has certainly not neglected the VIP business. The consensus in the industry is that is that he has done a first-rate job on keeping the marriage between GEG and its VIP players and junkets a happy one—first at StarWorld and now at Galaxy Macau. If you speak to executives from the junkets, they consistently single out GEG for praise in terms of its support and fairness toward the trade. Not all the Macau operators have been as consistent in their approach to managing these critical relationships.
Mr Hunterton is a 16-year veteran of the gaming industry in Las Vegas and Macau. Prior to joining GEG he spent three years in senior operational and business development leadership roles with MGM Grand Macau.
His appointment as deputy COO of Galaxy Macau coincided with Charles So being named deputy COO of StarWorld. Mr So, who had previously overseen hotel operations at StarWorld, has more than 30 years’ experience in hotel ops and F&B service.
17 Nicholas Niglio
Executive Director and CEO
Nicholas Niglio’s presence as the only non-Chinese member of the board of directors of Neptune Group speaks volumes to the esteem in which he is held in Macau and Hong Kong by players, operators and investors.
Hong Kong-listed Neptune, one of the five junkets that control an estimated 55- 60% of VIP revenues in the world’s largest casino market, has been in the vanguard of this year’s resurgence in the city’s massive trade in high-end gamblers after a mostly tepid 2012, when growth flagged sectorwide, comparatively speaking, on what appeared to be a combination of economic and political jitters in China. Not that you would have known that from Neptune’s performance, which belied the slowdown and outpaced the market over its latest sixmonth reporting period with profits that rose more than 33% year on year on a 29% increase in turnover.
The rebound in the market, which has seen VIP up 10.5% in the first half of 2013 over the same period last year, could total the US dollar equivalent of $29 billion by the end of the year. Neptune figures to be grabbing a significant chunk of that through a strategy of “continued controlled growth” that earlier this year saw the company add to its VIP room investments with a stake in 11 tables at the Grand Lisboa. The company currently shares in the win at 62 tables at four properties and expects that to increase to more than 110 tables over the next couple of years.
With three decades of experience on two continents to his credit, Mr Niglio is more than equipped to make it happen. He was schooled in the hyper-competitive world of Atlantic City gambling in its heyday, joining Resorts International in administration in 1978 and moving into casino marketing. He served as vice president of casino operations at Caesars, the city’s pre-eminent highroller venue of the time, and was senior vice president of Eastern Operations beforemoving to the Trump casinos in the early ’90s, where at various times over an eightyear career he headed up every facet of domestic and international marketing.
The six years in which he’s been in charge at Neptune have seen the company grow not only in size but in scale. In addition to a comprehensive range of travel and hospitality services it provides its VIP clients, Neptune has begun to exert a sizable impact on the bigger picture, notably launching two of the flashiest high-stakes poker tournaments in the world—the HK$2 million buy-in “Macau High Stakes Challenge,” which attracted the likes of Phil Ivey, Tom Dwan,Sam Trickett and Eric Seidel to StarWorld Hotel last August to compete for the largest prize pool ever offered outside the World Series of Poker—and June’s “Guangdong Ltd Asia Millions,” co-sponsored with PokerStars, a HK$1 million buy-in shark fest that drew to City of Dreams about 100 big-time players from every corner of the globe.
Amidst all this, Mr Niglio oversaw a corporate restructuring that resulted in a spin-off of Neptune’s operating division. The way it’s set up now, the public company controls the investment end, and the new entity, Guangdong Group, named for the company’s popular Guangdong VIP clubs, directly promotes the rooms. Guangdong directly controls 221 tables, about 11% of the city’s current VIP inventory. It’s the second-largest network in town.
With its distinct but complementary businesses and the management structure now clearly delineated, Neptune believes it is better positioned than ever to take maximum advantage of the opportunities that lie ahead.
18 Michael Leven
President and COO
Las Vegas Sands Corp.
“We’ve been lucky to have him” is how Sheldon Adelson summed up the performance of his second in command earlier this year. The occasion was Michael Leven’s receipt of the American Lodging Investment Summit’s “Lifetime Achievement Award,” the latest of many the veteran hotelier has received over the course of a distinguished 50-year career. It’s one in which he takes special pride, he says, since normally it’s given to CEOs in recognition of financial performance while in his case it was bestowed in recognition of his achievements as an operator. It was the critical ingredient Mr Leven brought to Las Vegas Sands when he joined the company in 2009 in the depths of the global financial crisis, and it continues to provide the terra firma beneath the indefatigable expansionism that defines Mr Adelson and LVS.
Time and again, Mr Leven has proven his worth behind the scenes at turning vision into reality. Along the way he’s been instrumental in solidifying the company’s standing in the financial community. He’s helped steer it through the Sands China IPO and the openings of Marina Bay Sands, Sands Bethlehem in the US and Sands Cotai Centralin Macau. He’s secured major partnerships and cross-marketing deals with an A-list of global hospitality, retail, restaurant and entertainment brands.
Did he bank on the costly court battles, the federal investigations, the unwanted publicity, the volatility at the executive level that seems at times to be part and parcel of a career at LVS? Probably not. But he’s handled it all with equanimity. And he’s kept the trains running on time, ensuring stability for the thousands in the rank and file around the world, and he’s done it with an admirable mix of worldliness, good humor and humanity.
“What I’ve realized, which has always been my style, is that I manage people the way I want to be managed myself,” he once told The New York Times.
A former president of Days Inn and Holiday Inn Worldwide, Mr Leven founded a company that developed and franchised the Microtel and Hawthorne Suites brands. He co-founded the Asian American Hotel Owners Association and helped grow it into the 9,300-member network it is today.
“Respect for other individuals is the most important characteristic,” as he said in that Times interview. “Although cultures change, and the way people appear to be may be different, internally there are similar values in every single human being. Though these values may be executed differently, underneath, all human beings are basically the same: they want to be treated with respect, have personal freedom, an ability to be successful. I think those values transcend cultures.”
He and Mr Adelson both hail from Boston and have known each other for decades. When Mr Adelson owned the Comdex computer trade show and Mr Leven was running Days Inn, they’d meet occasionally for dinner. He declined an offer to run the Sands when Mr Adelson bought the venerable Las Vegas Strip resort in 1988. But when LVS went public in 2004 he accepted a seat on the board of directors and served for about a year.
When he finally joined the industry full-time it was at a point in life when most men of his age and accomplishments have settled into comfortable retirement. But he took a page from the advice he offers the many young professionals he teaches and mentors: to challenge themselves, to take the example of his success and seize every opportunity to try something new and unfamiliar.
In his case, there hasn’t been a dull moment since and none on the horizon with the $2 billion-plus Parisian slowly taking shape on Cotai and EuroVegas on the drawing board in Spain—and who knows after that?—Miami if the political stars align, Vietnam should the ban on domestic gambling be lifted, and of course Japan in all likelihood.
What’s certain for now is that he’s on board through 2014. Mr Adelson extended his contract last year. He was wise to do so.
19 Ted Chan
Chief Operating Officer
Melco Crown Entertainment
“It’s all about the total experience,” says Ted Chan of the appeal of City of Dreams to the coveted high-limit cash players known in Macau as the premium mass. It entails offering the right mix of hotel rooms, F&B, retail and perks, according to Mr Chan, and is something he has been striving to improve ever since he joined Melco Crown Entertainment’s flagship casino.
The effort has helped increase the average length of stay of premium-mass customers at CoD to about twice the length of stay of its non-gaming customers, he says, and premium-mass revenue at CoD was the primary driver of Melco Crown’s consensusbeating second quarter results, along with higher group-wide VIP rolling chip volume and win rate and the company’s ongoing commitment to controlling costs.
Melco Crown’s net revenue increased 38% year on year in the second quarter to US$1.3 billion (with CoD contributing $967 million), and adjusted EBITDA was up 62% to $330.1 million. In addition to CoD, which produced 91% of group adjusted EBITDA in the second quarter, Melco Crown also owns and operates the VIP-focused Altira Macau, which generated $41.4 million of adjusted EBITDA, and the slot club chain Mocha Clubs, which generated $9.8 million.
Mr Chan became COO of Melco Crown in February last year. For two years prior to that, he had been co-COO, Gaming, while Nick Naples headed operations. Nick Naples left the company in conjunction with Mr Chan’s promotion, the culmination of a gradual assumption of all senior roles at the company by Chinese executives.
“The young and innovative culture of this company is bolstered by our understanding of the customer,” says Mr Chan. “Because [CEO] Lawrence Ho and the team are actually Chinese, and we grew up in this part of the world, we feel we understand the behavior of customers here better than anybody else.”
It’s a differentiating factor, and for reasons both obvious and subtle, an important one.
“For any strategy setup or marketing initiative the No. 1 goal is to know your customer,” says Mr Chan. “So we spend quite a lot of time understanding customer behavior.
“For example,” he explains, “if someone from China comes into your property, [even] if you didn’t grow up in this part of the world and study the culture in China, you might be able to recognize that person comes from northern China, and from that conclude they like spicy food. But then what’s the difference between this guy and somebody from Thailand?”
So a key part of Melco Crown’s mission to boost mass revenues is learning more about its customers’ preferences. “We do a lot of datamining exercises to find out who are the best customers, the middle customers and smaller customers, who we put into different tiers, so we’ll be able to align the right service to the right type of customer,” he says.
Having identified the premium mass as the most lucrative segment, Melco Crown fine-tuned the offering at CoD to cultivate it. “I think everybody is actually looking at that segment and would like to replicate what we are doing,” he says.
Mr Chan is a longstanding and trusted associate of Mr Ho’s. He worked with him first at Mocha Clubs, then left to take a role as CEO of an outside company, albeit one that worked in close cooperation with Melco Crown—Amax Holdings, a Hong Kong-listed junket aggregator that played a key role in sustaining Crown Macau (now Altira), Melco Crown’s first casino, when it opened. By November 2008, Mr Chan was back in the fold as president of Altira prior to assuming the co-COO position at City of Dreams in the summer of 2010.
20 William Weidner
Chairman and CEO
Global Gaming Asset Management
President and CEO
The successful opening of Manila’s Solaire Resort & Casino stands as a glittering US$750 million advertisement for the singular abilities of Weidner & Co. and the impact that Global Gaming Asset Management has begun to exert on the world’s casino landscape.
The one-time president of Las Vegas Sands Corp. has moved aggressively to ensure his Weidner Resorts is first to market in Taiwan, where gaming has been approved on the Matsu archipelago, and in May it was announced that GGAM had been chosen to manage Baha Mar Casino & Hotel, the centerpiece of a $3.5 billion, 1,000- acre destination resort in the Bahamas. Scheduled to open next December, Baha Mar is majority funded by Export-Import Bank of China. The lead contractor is China State Construction Engineering Corp. Significantly, it’s the first foray for both in the Western tourism and leisure market and a tribute to the esteem in which Mr Weidner and GGAM are held.
As with Solaire the strategy is to build a globally recognized brand designed, as Mr Weidner has put it, for “targeting customers in key markets, including Asia”.
That covers a lot of ground. But then he knows a good bit of it. He came up in the heyday of Atlantic City’s intensely competitive day-trip market as vice president of hotel operations at Caesars. He later moved down The Boardwalk to the Sands, where he served as president, and eventually headed Pratt Hotels, the hospitality giant that owned the Sands and was developing casinos and hotels at that time in the Chicago metropolitan area, in New York City, in Orlando and Palm Springs, Fla., and in Puerto Rico.
He’s best known for his 13 years as Sheldon Adelson’s right hand, when as head of Las Vegas Sands from its launch as a public company in August 2004 through March 2009 he was instrumental in building the company into a global powerhouse.
Few can equal the skills he exhibited as a diplomat and ambassador in guiding LVS into Macau and Singapore. Certainly no one has exceeded them. The respect and goodwill he’s shored up along the way have served GGAM well. He’ll be drawing on all of it, and a healthy dose of imagination besides, to bring off Matsu, which presents structural, regulatory and geopolitical challenges that are, to put it mildly, unique. To meet them he’s conjured plans for a veritable resort city to open in phases with gaming as the anchor for a cluster of hotels and leisure attractions designed to bring 5 million-7 million visitors a year to the tiny island chain 10miles off the coast of China’s Fujian province. The current price tag is $2.5 billion, a good portion of which is earmarked to bring the islands’ primitive electrical, water treatment and transport infrastructure into the 21st century.
A consummate negotiator, he’s reached across the Taiwan Strait to sell officials in Fujian with its 37 million inhabitants on the wisdom of joining forces, and last December, Weidner Resorts signed a preliminary agreement with Hong Kong ferry operator Chu Kong Passenger Transport for a service between Fujian’s capital of Fuzhou and Matsu. Weidner also has proposed the development of a supporting tourist hotel near Fuzhou, whose4.4 million residents, together with the 5 million or so living in and around the port city of Xiamen farther south, are considered key to the success of whatever ultimately gets built on Matsu. It’s reported that Fuzhou officials like the hotel idea, as does Taiwan’s pro-business Minister of Transportation and CommunicationsYeh Kuang Shih, whose department has drafted a framework for regulating resort-scale gaming that is under consideration by the national parliament in Taipei.