Inside Asian Gaming

Cover Story to do your calculations. “Here in our Macau properties we have a PoS (Point of Sale) system where we get sales figures daily via the cash registers.That goes into our database so we can see on a daily basis what the retail is doing. Marketing support “It’s not just so we can set the rent levels, but also for us to find out what’s working and what’s not working in our marketing. If for example we can see we’re having slow days in a particular category even though we’ve done some promotional work,we may need to reassess how we’re approaching things and analyse what we’re doing in our marketing. “When we arrived, the retail market in Macau was in its infancy,” adds Mr Sylvester. “I think theaverage rentwas aboutHK$20 per square foot. We achieved US$30 per square foot. It’s a case of setting benchmarks and then going out into the market. “Normally when you lease a shopping centre you do research and work out the total sales in that market and then work out occupancy costs and come up with rent. From scratch “The problem with this market was there weren’t really any shopping malls and also the market we’re in isn’t really a domestic one. We couldn’t go around and look at what was happening [in the local shopping districts] in Macau, because those retailers and local shoppers are not really our customers. Our customers are coming from China and places like Japan and Taiwan. It’s not an ideal way to set it up, but you have to work with the information you have,” he explains. “In this particular environment we had to just go out and sample the market. Our first deals were in watches and jewellery, then the next deals were with fashion [retailers] and so on, working our way through the categories and we then set rental levels based on that feedback.” The Chinese customers that Mr Sylvester mentions have been in short supply recently at The Venetian Macao. This may be linked to several factors. The first is the well documented one about visa restrictions introduced by China. This cannot be the whole story though. According to research conducted on behalf of LVS by the University of Macau between 4th and 10th August this year, only 32% of The Venetian Macao’s visitors are from Mainland China, whereas 58% of visitors to Macau as a whole are from there according to Macau’s Statistics and Census Service, known as DSEC. High rollers high-tailed? So what’s going on? Another possibility is that high-end Chinese gamblers and high- end Chinese shoppers aren’t particularly attracted to The Venetian because they don’t want to mix with mass patrons. One of their motivations for working hard and getting rich was precisely so they wouldn’t have to line up with ordinary Joe Wongs to taste life’s pleasures and life’s necessities. Mega- rich Americans such as Bill Gates andWarren Buffett may pride themselves on personal modesty and the common touch, but that may be a culture-specific preference that doesn’t travel into emerging markets. “One thing the high rollers do not like is mass,” says David Sylvester. “You’ll see at The Venetian that they very rarely venture outside of the Paiza [VIP club] area. They don’t like coming on the main gaming floor, they don’t like mixing with the masses, so that’s the rationale for the way The Four Seasons is pitched.” The other side The Four Seasons’ shopping area is designed by ambience and location to plug directly into the high roller market. It’s linked by air-conditioned walkways to the Four Seasons Hotel and has, as mentioned, a private entrance exclusively for VIP use. The hotel includes suites with built-in gaming rooms in an echo of the intimate club style atmosphere available in some European gaming establishments. LVS president WilliamWeidner says the company is already recruiting VIP players from as far afield as the Middle East for these suites—exactly the sort of audience that LVS’s luxury retail partners are seeking. “One of the pitches for Four Seasons mall is we’re doing limited editions specific to the venue,” says Mr Sylvester. “For instance we’ve worked with Versace to do a line of two bags.That’s really targeting our Paiza level customers.” Up market “We really seeThe Four Seasons andPaiza together in terms of consumer audience,” explains Mr Sylvester. “The Paiza customer is the Four Seasons customer.The Paiza customer likes oneoffs— they like to think of themselves in terms of exclusivity. They like to think they can get a product no one else—or at least very very few people—can get. That’s really the angle we’ve taken with our launch through our ‘One in a Million’ campaign. “We call The Four Seasons our boutique mall, because the whole idea is it’s intimate, it’s small,” adds Mr Sylvester. Personal touch “It feels like you’re not in a rush. If you November 2008 | INSIDE ASIAN GAMING 25