Inside Asian Gaming

INSIDE ASIAN GAMING | November 2008 22 Cover Story within the so-calledGoldenWeek,theholiday period straddling China’s National Day on 1st October.The second part was based on data and information collected from government departments and ‘stakeholders’ (the modern buzz word for any person or group with the capacity to cause trouble if not consulted). Perception test The IFT said that a total of 5,158 residents and 5,120 visitors were sampled. They were asked for their perceptions on ‘crowdedness’. That itself is arguably a loaded question and likely to produce a less than enthusiastic response. When was the last time you met a person (other than perhaps a retailer) saying that his or her local streets were not crowded enough? The sample was also asked about its levels of satisfaction regarding the local environment, local transportation, the local food and beverage trade and shops. The sample was also questioned on waiting time as well as service quality, and also waiting times at the border. Without delving too deeply into the methodology of the study, and whether or not some of the questions might have been loaded, the message was that Macau had a good number of disgruntled locals and visitors, and unless Chinese people suddenly got bored of coming to Macau, something was likely to be done to control arrivals. T his magazine has argued for some time that more attention needed to be paid to quality of visitors rather than quantity, if Macau’s reputation as a world-class tourism destination was to be developed and if the gaming and hospitality industry was to benefit significantly. We said so in our story ‘Borderline Case’, published in January. At no time did Inside Asian Gaming argue for the restriction of themovement of people across borders, whether internal or international. Genuinely free markets need free people. Instead, we pointed out the potential benefits of pricing as a way of moving upmarket. We quoted government visitor surveys suggesting that up to 26% of Macau’s 26.9 million visitors in 2007 classified themselves as ‘economically inactive’, consisting of the jobless, retired or students. That’s a lot of people on a very small budget. Within six months, at least one Macau government official was publicly expressing similar thinking. This is what Maria Helena de Senna Fernandes, the deputy director of Macau Government Tourism Office, said in remarks quoted in the international media in July: “Obviously,from a strategic point of view we feel this is a very good moment for us to not just pursue quantity but also to give a very good look at the quality of what we’re providing.” Conceptual leap The jump from an individual official expressing a generalised desire to improve the quality of Macau’s visitor market, to visa rationing is a very big one indeed. Market entry cost (as opposed to casino entrance fee, as is planned for Singapore) is a factor in upmarket gaming jurisdictions such as Monaco, the autonomous principality in the south of France. Monaco in general, and Monte-Carlo in particular, is simply too expensive for all but the most well heeled visitor to spend more than an hour or two there. For political reasons, China might not wish to be seen to be turning Macau into the Monte-Carlo or the Nice of the east. Macau’s hoteliers and gaming operators might also reasonably argue they’d already tried pricing and it didn’t work in stemming the flow of Mainland visitors. In any case, why shouldn’t Macau, after so many centuries of political separation from China, become a playground for the grandsons and granddaughters of Mao’s revolution, rather than an upmarket playground for the country’s uber-rich, as well as Overseas Chinese and foreigners? China, not Nevada Macau is often referred to in the international media as ‘Asia’s Las Vegas’. Sheldon Adelson, the chairman and controlling shareholder of Las Vegas Sands Corp, the biggest single foreign investor in Macau’s new gaming infrastructure by miles, loves the phrase, and his company even had it trademarked. There may well be things Macau can learn from Las Vegas, and not just in terms of infrastructure and service culture. Vegas makes a point of welcoming everybody and is probably the best example yet of a gaming jurisdiction with services to suit every price point. The comparison with Nevada’s gambling hub is not,though,one oftenmade byMacau government officials.That may be a clue that reveals the fault line between how foreign investors see the future of Macau and how the local politicians and national leadership in Beijing see it. Politics and history do to some extent tie the hands of the Macau government and its tourism marketing effort, but politics and history will only take Macau so far.The worst- case scenario is for Macau’s economy and society to be exposed to the downside of the free market in terms of intense competition for resources and rapid urban growth, while at the same time being hobbled politically so that investors, residents and visitors can’t enjoy the benefits of that free market. Only time will tell which of these competing impulses—market-led innovation or social engineering—will be allowed to prevail. Free markets need free people Travel curbs on consumers not a long-term solution The regal Casino de Monte-Carlo