Inside Asian Gaming

inside asian gaming FEBRUARY 2016 8 decrease in gaming revenue. At Mr Wong’s estimated MOP$5,000 per visitor, Macau would require some 24 million additional visitors to produce that lost revenue. On the other hand, Mr Cavender estimates that for a major trip, China’s middle class consumers could spend US$10,000 in Macau. At that rate of spending, 1.5 million visitors would make up for last year’s fall in gaming revenue. All of that money would not be spent on gaming, but some would go to segments with higher profit margins, most notably lodging. “Mass market customers who are willing to spend at a more premium rate than the previous low end mass that Macau was accustomed to will be key moving forward,” Hogo Digital Managing Director Chris Wieners says. “It will become a volume game – and I believe it’s a game Macau can win. Considering China’s middle class and the growth potential over the next five years, any anomalies withstanding, and the fact that the majority of the Chinese middle class have never stepped foot in Macau, the destination has potential to become the destination of choice for Chinese consumers.” Slower economic growth in China is having an impact on spending, Mr Cavender, whose firm tracks mainland consumer trends, says. “We are in an economic cycle where consumers are still spending, but where they are being much more choosy about how and where they spend.” The challenge is to get those potential middle class visitors to choose Macau. PRICED RIGHT Some believe there’s an affordability factor keeping middle class visitors away, but experts disagree. Macau is “totally affordable,” Mr Wong says. “Most of the entertainment and dining options are affordable.” The exception is accommodation during high Cover Story Galaxy’s Broadway gets mixed reviews Galaxy Entertainment Group spent HK$5 billion (US$644 million) to remake Grand Waldo into Broadway Macau as a middle market compliment to predominantly high end Galaxy Macau next door. With the lowest hotel rates in Cotai, a 3,000 seat arena, intimate casino plus Macau-centric retail and casual dining options in a street festival setting, “Broadway Macau is a mass market dream,” Hogo Digital Managing Director Chris Wieners says. Eight months after raising the curtain along with Galaxy Macau Phase 2, this Broadway isn’t yet a runaway hit. Broadway Hotel has “almost 100%” occupancy for its 320 rooms, a Galaxy spokesperson reports. Room rates starting around MOP$800 (US$100) include access to Galaxy’s signature Grand Resort Deck with its wave pool and river rides. The arena, filling a niche between Sands China’s 1,700 seat Venetian Theatre and Melco Crown’s 5,000 seat venue at Studio City, has hosted a variety of shows. Overall, Broadway attracts between 8,000 and 14,000 visitors daily. Galaxy says 55% of visitors patronize its F&B offerings, featuring Macau specialties along with retailers of local food souvenirs with a mobile stage and busker style entertainment. Studio City features a similar food concept, Macau Gourmet Walk, though it’s located indoors, a level above the shopping mall and includes international chains. The Macau government has made support for local small and medium enterprises a criterion for allocating additional gaming tables, and it could also become a factor in awarding gaming concessions, which will start to expire in 2020. The question lingers whether Macau themed F&B is a winning concept for tourists or a market “distortion” created by government policy that GamePlan Consulting founder Sudhir Kale warned about at November’s Macao Gaming Show. Institute for Tourism By Muhammad Cohen