Inside Asian Gaming

August 2009 | INSIDE ASIAN GAMING 27 “In Las Vegas and Atlantic City, resorts started out small and grew as new dining and entertainment trends were added. Here in Macau some of the amenities are brand new so an evolution process needs to take place. Instead of the resort growing with the market, this market has to grow into the resort,” he suggested. A popular perception internationally about the Asian casino industry is that it tends to borrow design, marketing and merchandising ideas from Las Vegas and other Western jurisdictions. But Western casino operators appear to be drawing on important lessons learned by Asian casino developers. A combinationof rising land values during economic boomtimes, and stressed balance sheets during a bust, has led many Las Vegas operators to focus on incremental changes to existing properties rather than building anew on green or brown field sites. For at least the previous three decades and probably longer, the Vegas model was one of so-called ‘implosion’, i.e., the constant tearing down of properties that had reached a certain age, and their replacement with new ones. “The idea of building big resorts [in Las Vegas] is dead—for now,” Dennis Forst, a stock analyst with KeyBanc Capital Markets told the Las Vegas Sun in July. “Investors want to know how they’re going to pay down debt and shore up their balance sheet. They don’t want to hear about spending a billion dollars on a new venture,” he said, referring to the financial troubles of Las Vegas Strip resorts now under construction. Softly softly That incremental approach has been seen in Macau, with Stanley Ho’s casino holding company SJM adding hotel accommodation to his Grand Lisboa property and SteveWynn currently building Encore Macau, the VIP-focused extension to Wynn Macau. As US real estate becomes more expensive and projects extract more value from less space, architects have begun adopting Asian design techniques, said Brad Friedmutter, founder and CEO of Friedmutter Group, during the G2E Asia 2009 session. The Group is an architecture and design practice with offices in Las Vegas, New York, California and Hong Kong. In recent years the average ‘footprint’ (i.e., plot size occupied) of new Las Vegas developments has been shrinking relative to the amount of gaming, retail and hotel space on offer. This mirrors exactly the format of developments on Macau peninsula, where land is scarce and expensive. Only on the island of Cotai, reclaimed from the muddy waters of the Pearl River Delta, have the operators been able to stretch their integrated resort ‘legs’. Mr Friedmutter believes condensed sites and multi-level casinos will eventually become the norm across US markets. In Focus The Lion’s Bar at the MGM Grand Macau has been a successful hit in the city’s nightlife