Inside Asian Gaming

INSIDE ASIAN GAMING | August 2008 16 LVS seems to think new VIP gaming suites within the Four Seasons Hotel Macao could be a key factor in building its Macau VIP business. The argument is that the hotel setting will offer a muchmore intimate and low-key setting thanTheVenetianMacao. At The Venetian, VIPs must face some of the bustle of the mass- market areas before ascending to the rarefied setting of The Paiza Club on the 36th floor,where gamblers are reportedly expected to guarantee a minimum line of credit equal to US$1 million. Boutique approach LVS Executive Vice President Brad Stone previously told analysts at the Q1 2008 earnings conference call in April: “We’re hearing from the market itself that there is a strong desire for a Four Seasons type of product to round out our initial offerings here at the Cotai Strip” He added: “We are going to have two different types of experience for the VIP customer here in Macau very shortly. One is the big property Venetian experience, which includes obviously showing [Celine] Dion shows, lots of restaurant, shopping and entertainment options, and a lot of variety of room product.We’re also finding a desire in the VIP market for a smaller and more boutique hotel experience and certainly TheVenetian,The Palazzo and Four Seasons allows that opportunity for us. Cross promotion “We will have [at the Four Seasons] a ground floor premium player area, which is designated for customers directly marketed by Las Vegas Sands and Venetian Macao Ltd here. “We will more than likely end up with two floors of junket rooms above those, because we are seeing a real desire by our junket reps to have a presence at the Four Seasons itself. And then later on, at the end of this year, we are opening 19 really luxurious apartments with their own casino. Each suite actually has its own casino gaming room, as well as restaurant reminiscent of what you would see in London, in terms of the type of experience and similar way to what The Mansion provided in Las Vegas for its customers.” In pursuing this low-density, high-luxury format, is LVS at risk of miscalculating the driving force of the Macau VIP trade or simply building a niche market not currently covered by rivals? Such facilities may appeal more to overseas Chinese and Japanese high rollers than to hardcore mainland Chinese players. Despite its much-trumpeted six-star billing, Crown Macau hardly registered on the VIP map until it dramatically bumped up rolling chip commissions in the deal with A-Max. The message from the Crown Macau experience and subsequent commission war was that in the Macau VIP market, competitive deals for junket agents allowing greater player liquidity translate into a higher volume of business. Positive note Mr Weidner, speaking at the Q2 conference call, remained upbeat about LVS’ prospects in the VIP sector. He said: “Our VIP business is moving in the right direction, with rolling volume increasing 13.6% sequentially in the second quarter. The total cash flow generated from this business also is increasing sequentially. As we begin to prudently grant more credit and as we add our upscale casino at the Four Seasons, we expect to continue to grow both our share of this business and our total cash generated from it.” Four Seasons Hotel Macao Secret weapon in the VIP war? Feature