Inside Asian Gaming

April 2012 | INSIDE ASIAN GAMING 37 Now StarWorld boasts one of the highest returns on investment of any casino property in theworld. Obviously Galaxy Macau is a totally different kind of property, different scale. But how are you doing in terms of ROI so far on this property? As you said, StarWorld and Galaxy Macau are two very special casino resorts, but very different casino resorts. As StarWorldopened a bit over five years ago, we celebrated our fifth anniversary at StarWorld in October, with our team members and with our guests that have been amazingly loyal to the process. We celebrated with over 3,000 of our team members that are over five-year teammembers.Their loyalty to this company is remarkable. StarWorld was built for a price of around 3.4 billion, Galaxy Macau was around 16.5 billion Hong Kong dollars. So they are very different resorts. The return on investment for StarWorld is possibly the best in the entire industry at about 86%. So as Galaxy Macau ramps up, as our business model evolves, the margins, the cash flow, the return on investment continues to grow as well. You mentioned the City Clubs. They were a great entry into this market. But profit growth at the City Clubs has lagged that of the rest of the group recently. What is your strategy in terms of the City Clubs? The City Clubs continue to be a very valuable contributor to our company. The four City Clubs Waldo, Grand Waldo, President and Rio, are performing very well. Last year they contributed HK$185 million to the company’s total EBITDA, and it was a 16% growth over the prior year. So we are pleased with the continued efforts of our team members at all of our City Clubs, and again they continue to be a genuine contributor to our company. Your earnings are still primarily driven by VIP gaming, even though you now have this great mass market property in your portfolio. What are you doing to drive higher-margin mass market play, and what segment of the mass market are you most interested in? Well, we’re interested in all segments of themarket at GalaxyMacauandat StarWorld. And through the ramping up of Galaxy Macau, our mass business has continued to evolve. Each month our position in the mass-market arena has grown, and in the fourth quarter of last year we had the most significant percentage growth in mass business of any resort in Macau. We have a fabulous team that is very focused on the mass business, and most recently we have opened our Pavilion Club concept. Just a few days ago, we opened The Pavilion High Limit Slots area, we feel the most luxurious high limit slot room in the industry, and we have three Pavilions on the mass floor that are devoted to mass and premium mass table games. So we have given great attention to a very special style of service through our Pavilion Club, we have a fabulous team that is devoted to the mass business, and we’re pleased that the growth of themass business at Galaxy Macau is the most significant in the industry. What would you like to see from the other Macau casino operators towards furthering growth of the market? You know, we talk to the other concessionaires regularly, and I believe we all agree that in order for Macau as a destination to continue to evolve and become more and more popular, it’s very important that any new property follow the model of Galaxy Macau. That any new property must add value to the proposition of Macau as a great holiday destination; for gaming, certainly, but what our guests tell us about Galaxy Macau is that it’s a property where they can choose to come here for a holiday with their family. Where you can arrive at three great hotels, and you can arrive at beautiful, different lobby areas that present the theme and the identity of those three great hotels. Where you can go to any one of the 50 food and beverage outlets, you can come to the most fabulous resort deck in the world, and if you choose to go to the casino, that is your decision. But what needs to happen in Macau, and all of us agree, is that any new resort must add value to that proposition and again follow the lead and the model of Galaxy Macau. And what would you like to see from the government towards helping further growth of the market? We have a great relationship with the government. The government is very supportive in every area of the business of the resorts in Macau. And we all know that with the low unemployment rate in Macau, that new team members for the ever- growing set of resorts is an issue that is a concern, but we have great faith and in all of our conversations with the government, they appreciate all of the challenges that the industry faces, and they work very closely with us to resolve those issues. Punching above its weight—StarWorld Hotel & Casino Still contributing—Rio Hotel & Casino is one of Galaxy’s four city clubs in Macau Surf’s up—the wave pool INSIGHTS