Gambling City Macau
Macau is rapidly transforming itself into a jewel of Asia by abandoning its image of a sleazy gambling mecca for something more wholesome. Consultant Ben Lee says competition is the driving force. “Since Stanley Ho’s 40-year casino monopoly was broken, the number of licenses to operate casinos has increased to three,” he said. “But since Macau allows sublicenses, or licenses sold to third parties, the actual number of casino licenses has increased to six.” That, he says, triggered heated competition among casino owners, and as a result, Macau’s gambling revenue has outstripped Las Vegas’ in just three years.
On May 18, 2004, Sands Macao had its grand opening next to the terminal where the ferry leaves every 15 minutes for Hong Kong. It was the first casino in Macau for Sheldon Adelson, the godfather of Las Vegas casinos. People in charge of the existing 16 casinos were dumbfounded by the stark contrast between the way they operated and the way the new casino did. Stanley Ho casinos centered on small, closed VIP rooms, but Sands opened the center of the fifth floor and installed large screens on the walls. At first, the others jeered at Sands because they thought a casino is a place men visit alone to gamble wreathed in thick cigarette smoke.
They were wrong. While their revenues suffered no great dent, Sands wrote a new chapter in Macau casino history by retrieving the US$240 million initial investment within just seven months of its opening. The older casinos had spent the bulk of their marketing expenses on attracting VIP customers, who accounted for 20 percent of gambling revenue. But Sands Macao demonstrated that focusing on ordinary customers, the so-called long tail market, is more profitable than business from VIPs. And aside from the gambling intake, Sands also made handsome profits from restaurants and luxury stores where ordinary customers spent a lot of money.
August sees the opening of the Venetian Macao-Resort-Hotel. The hotel’s 3,000 rooms, all suites, make it one of the biggest in Asia. Every room will be equipped with two large TVs, two phone lines, personal fax, printer, copier and a rack for a laptop computer. Three waterways will be built inside the hotel for a gondola to float on and produce a sense of the Adriatic city. The hotel will house a convention center, a movie theater, a shopping mall and a large-scale entertainment stage — a totally different concept from existing casino hotels.
Now Stanley Ho, challenged by the new marketing ideas and influx of Las Vegas capital, is also trying to attract more ordinary customers by putting on shows and performances. He has remodeled his Greek Mythology Casino on Taipa Island into an American-style casino. And with Casino Lisboa, Macau’s flagship casino since 1970, dwarfed by Sands Macao, Ho has just built the Grand Lisboa to keep up with the Joneses.
Macau’s transformation has brought about a tangible increase in the number of tourists and casino gambling revenue. The number of tourists nearly doubled from 11.88 million in 2003 to 22 million in 2006, and gambling revenue surged from $3.56 billion in 2003 to $6.9 billion in 2006, for the first time topping Las Vegas’ $6.5 billion.
Macau is hoping to transform itself from a gambling city to an entertainment city.
Victor Chan, a marketing official with the Macau Government Tourist Office asserted, “Macau is no longer a gambling city. It’s a city where western and eastern culture coexist, with 25 UNESCO World Heritages Sites and business convention centers. Macau is a city of casinos that the whole family can enjoy.”
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July 6th, 2007 at 0:39
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