Inside Asian Gaming

INSIDE ASIAN GAMING | March 2009 operators, they are all top brands. That’s a great market, but there’s also a great market for another tier of customers if we’re able to capture it. With our integrated resort structure, we can cater for the first tier customer, at for example the Banyan Tree, but we also have 1,500 rooms catering for a second tier market, where we feel there’s a gap that we can fill successfully.” Are you happy with StarWorld’s performance so far? Mr Lui: “In business you always strive to do better. And in fact starting from the second half of last year, our market share in StarWorld started coming back up. We lost market share previously not because we were doing worse, but because that explosive VIP market growth was being triggered by a loosening of credit. “But people now recognise there’s a changing strategy [in the market as a whole] and we believe our performance is going to get better. That’s not just in revenue terms but in terms of increasing our service too. At the same time we are also very mindful of cost control. So overall we feel that StarWorld will perform even better this year.” Mr Drake: “The pricing advantage if you will was created by a ‘price war’ in the first quarter of last year. But over time we believe price is not a sustainable competitive advantage. Since you have levelled the playing field on price then what do you compete on? You compete on other things such as service. I think we do an outstanding job by virtue of our improving share. We are gradually increasing our share profitably and I think that’s proof that the strategy is working. We’re very well positioned now and in the future. StarWorld is a very successful property, with great returns on investor capital, and we do a great job servicing our guests.” Are you interested in expanding your mass-market appeal at StarWorld? Mr Drake: “If you look at the weighting of our revenue base, StarWorld is traditionally more weighted toward the VIP market and we’re positioned as that type of property. But at the same time you want to look at all different revenue streams and of course we’re building things like our premium play, which sits above the mass, and then the traditional mass play. That’s a very profitable segment of the market. Is it going to be like other mass-centric properties? StarWorld is not that type of property. Our property is a smaller offer on the mass gaming side by virtue of our constrained footprint. We’re going to increase our mass market on the basis of profitability, not on the basis of headcount just to make ourselves feel good. If there’s lots of energy on the floor you want to channel it profitably, just like with our VIP business, and of course you’re going to target all the segments over time. We think we provide great levels of service, not only to our VIP customers, but we think we do an equally great job to our mass customers. The point is we’re always striving to do better, in whatever segment, whether it be VIP, premium or mass market play.” What role will standalone slots and multiplayer games have in the product mix at StarWorld in 2009? Mr Drake: “Frommy old life in Las Vegas, one could say Vegas is a slot-centric model whereas here in Macau it’s definitely a table-centric one. It’s really a question of who your customer is and the mindset of the gamer. “Here table games are viewed as games of skill—house versus man—and I don’t think that’s how slots are perceived here. Over time that may evolve as the destination model evolves. It’s still a very small percentage of the business. Will it grow over time? Probably, but nothing like the degree in other markets. Macau will still be a table-dominated market, but that’s not to say there won’t be significant upside in slots.” Mr Lui: “At StarWorld, we have multi- station poker and live poker too. We do see some potential in slots which have traditionally almost been ignored in Macau. All the money’s been made in table gaming. But in some of the bigger properties where it is a fully integrated resort, it is attracting not just the pure gaming players any more, but the families and the holiday goers. And the electronic games offer is probably more suited to these consumers. “Would the electronic games market take off at a property like StarWorld? Probably not. We don’t have the facilities to be honest. Probably in Cotai where we will have an integrated resort and be attracting a different clientele, then it will really take off.” 14 The StarWorld lobby Cover Story