Inside Asian Gaming

November 2011 | INSIDE ASIAN GAMING 37 Feature W ith an estimated average 95% of all revenues from Macau casino-hotels currently being generated by gaming, how focused are Macau operators on strategic marketing of their hospitality offers? Some analysts think mainland China’s social and economic development isn’t yet at the stage where Macau casinos can do extensive cross- marketing of gaming and hospitality to support each other. Macau’s Chinese visitors are either very rich or quite poor, goes the conventional wisdom. The relatively poor ones can either afford to gamble or to shop—but not many of them can afford to indulge in both forms of discretionary spending. China does have a growing middle class. And the issue of driving non-gaming revenues in these multi-billion dollar properties is especially pertinent given the low house edge on baccarat (and thus low profit margins for casinos on baccarat play) compared to say slot machines—the dominant method of gambling in the US casino market. Retail customers have expressed a strong preference for booking room nights along with a bundled ferry ticket and other add-ins such as casino credits and breakfasts. Or have they? Are customers really demanding packages? Or has the Macau market simply created bundled deals with value propositions so great that customers would be foolish to book at a room-only rate? Which came first—packages or package demand? Research of available Macau casino packages reveals that the most basic (hotel accommodation plus a one-way ferry ticket) will save customers at least MOP100 (US$12.5) compared to buying the two components separately. More complex packages that add Room for Improvement? Macau’s hotel offer could benefit from more strategic pricing and marketing