Inside Asian Gaming

November 2012 | INSIDE ASIAN GAMING 39 Feature T o most observers back in the summer of 2004, Galaxy Entertainment Group’s Macau debut would have looked to be anything but auspicious. The group got its start running gaming operations at The Waldo Hotel, opened under third-party ownership in June of that year in a converted office building near the Ferry Terminal, with a casino containing all of 38 table games and 150 slots. Eight years and five properties later, Galaxy is acknowledged in the largest of the world’s casino markets as one of its leading operators, its US$1.9 billion Galaxy Macau on Cotai hailed as an avatar of the market’s future. GEG was the only one of six post- monopoly casino operators to enter the market without any established experience, much less brand identity, in the gaming industry. But at The Waldo, by cannily concentrating on the VIP market, it out- grossed more publicly promoted properties such as Sands Macao in its first year of operation. Armed with that experience, GEG went on to build its first flagship property, the US$436 million StarWorld Hotel and Casino, in 2006. Since opening, StarWorld has enjoyed steady growth in the VIP business, and continues to be not only the most profitable property per square foot in Macau, but also one of the highest-returning gaming properties in the world because of its central location and world-class product offerings and service. In the third quarter of 2012, StarWorld’s revenue topped HK$5.2 billion (US$667 million), and the property generated a return on investment of 99%. These formative years for GEG and its vice chairman, Francis Lui, were critical to the success of what would become the company’s most ambitious undertaking. They allowed Mr Lui the chance to analyze Macau’s visitor patterns and preferences, particularly among those arriving from the lucrative mainland Chinese tourist market. At the time, income and discretionary spend among Chinese were on a steep rise, and with it, China outbound travel and the phenomenon of the “free independent traveler” (FIT). FITs were also showing increasing attraction to the already popular destination of Macau. Visitor arrivals to Macau grew steadily from 11.5 million in 2002 to 28 million last year. Mr Lui’s winning proposition was to developaresort,GalaxyMacau,thatappealed Galaxy Macau on Cotai A Gaming Brand is Born Galaxy Macau’s Senior Vice President of Marketing Janette Kendall and Vice President of Marketing Communications Jane Tsai outline the background to successfully launching a new gaming brand in a high-stakes, hyper-competitive market