Inside Asian Gaming

“I think the message we want to get out there is that we’re building a very strong foundation for the business,” concludes Mr Pisano. “Youcouldsaywe’removing tomoreof aboutique- style product. Every property that we open improves on the previous one.We don’t say:‘We’ve started with this, and we’ve kept it like this.With every property we learn. We think ‘In the next property we can do this a little bit better or we can place a bar here, or we need some room for food.’ “The foundation that has been built over the last six months is that we now have solid clubs in our core markets.We see month-on-month revenue growing in all our properties. We as managers are very aware of the global market conditions that we’re operating in. We know that money is tight for investors and there’s competition for access to investment capital. We are absolutely committed to excellence in managing our capital and human resources so that over the next 12 months we’re generating the best possible returns on capital.” Loud and clear Elixir sends a message to the market Elixir from outside that five kilometre radius, it’s going to take an hour because of the traffic,” states Mr Pisano. Even in markets without the traffic problems of Metro Manila, building a loyal customer base protects operators from falling victim to the latest fashion. “The problem with the non-club model is that no matter how much time and effort is put into getting the right mix of games etc, when a new property opens down the road, the first property empties out and the customers pile into the new venue, and so it goes on. We don’t want to build that model.We don’t look for one-off events,” he explains. “We have a marketing team based in Manila.We look for partnerships with venues in densely populated areas and we look at the local community. Our idea is to have centres where the local community want to come. That’s what we look for. These aren’t necessarily tourism destinations.” Mr Pisano says the company has refined its technique for identifying partner venues. “There is no shortage of venues where we can place machines. I would say 90% of the time people are knocking on our door rather than the other way round. We have become increasingly selective. We actually do a case study on each property now. It includes the demographics of the region, and of that particular area. We look at that before we commit to going in.” “In Vietnam which at the moment is a foreigners and non-resident Vietnamese- only market, we have moved into the border towns.We’re up in Lao Cai on the border with China,” adds Mr Pisano. “There’s a new expressway opening this month from Kunming city in Yunan province, China, to Lao Cai in Vietnam. There are 42 million people in Yunan, so that road is opening up access to a very large number of consumers. “We’re also looking at the border town of Bavet in Cambodia,which is only an hour and 20 minutes by road from Ho Chi Minh City in Vietnam. There are several casinos going up there. The largest one is the Caesars, a beautiful new property and we’re looking to go in there.We have a regional strategy.” Elixir also seeks out partners actively committed tobusiness growth.The company points out the turnkey model doesn’t mean that venue operators can simply sit back and expect revenues to flow. “In Asia you need proactive operators that will help market the property, bring in the players and retain the players. We’re looking now at partners that will do that. Having a year’s experience of the market, we know the people that do that, and we know the people that don’t.” This statement of intent isn’t just for the benefit of market analysts. EGT announced in its Q2 earnings conference call that it was pulling out of several underperforming venues. Tony Lam, Senior Vice President, Operations, says: “If a venue has been open for a couple of months and is only providing a US$9 to US$10 net win we’ve got no business staying in there. It’s not going to bring a return on the investment.” September 2008 | INSIDE ASIAN GAMING 33