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Galaxy Macau launches mass-market era

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image Chief Executive Fernando Chui Sai On (C) was the guest of honour at the grand opening of the third integrated resort in Cotai, the HKD 14.9 billion Galaxy Macau, yesterday

Almost a decade after Stanley Ho’s monopoly ended, the local gaming market seems on the edge of turning the corner from VIP-centric to mass-market. After successfully attracting the new Chinese millionaires, operators are now eyeing the burgeoning mainland middle-class.
And that’s the gamble that Galaxy Entertainment Group (GEG) have taken constructing its HKD 14.9 billion Galaxy Macau. The 550,000 square metre Cotai resort opened its doors yesterday after a two year delay.
“The opening of Galaxy Macau signals a new era for Macau,” GEG founder and chairman Lui Che Woo said. “With Cotai at the centre of Macau’s continued growth, we need to look ahead and pursue greater diversification in order to fill a gap in the market.”
“We are not hoping to get a bigger piece of the existing market, we are hoping to help make the pie bigger, by creating a new source market,” GEG deputy chairman Francis Lui added.
The average length of stay of tourists to the MSAR dropped to 1.45 nights in March but the executive hopes that Galaxy guests will stay ‘on an average two days or more’.
“We are building this resort exactly to try to extend the length of their stay, by offering some non-gaming activities. We hope they will want to bring their families and come again,” he said.
“We are trying to merge Phuket [resort island in Thailand] with Macau to bring this tropical mood,” Francis Lui explained.
“We have a beach as good as any in Phuket,” he said. Galaxy Macau has a sky wave pool plus a man-made beach with 250 tonnes of sands covering a total of 4,000 square metres.
The Okura and Banyan Tree hotels will also bring tourists from other regions of Asia, GEG deputy chairman added. “These brands have their own customers and we hope to attract them to Macau.”

Profitable mix

The casino will have a capacity for 600 gaming tables but opened with only 450, one-third catering to the VIP market.
The proportion of mass-market revenue versus VIP revenue will be “a healthy mix” and “probably better” than in the neighbouring Venetian or City of Dreams resorts, GEG chief financial officer Robert Drake said. And, he stressed, mass-market is “more profitable”. While the average VIP win range in Macau casinos goes from 2.7 to 3 percent, the average win range for mass-market is 21 to 23 percent.

‘We are hoping to help make the pie bigger, by creating a new source market’: Francis Lui

Galaxy Macau’s opening will push the number of tables in local casinos close to the 5,500 cap set up to 2013. “In large, most of the 450 tables will be new,” not shifted from other local GEG operations, chief operating officer Michael Mecca said.
Recently the Legislative Assembly (AL) approved a tobacco control law that gives casinos one year to set up smoking areas of up to 50 percent of the total public area.
“We will review the situation, the details of the law and make appropriate arrangements. We are confident we will be able to make all parties happy,” Francis Lui said.
The AL will also vote on a draft law restricting people under 21 from entering and working inside casinos.
“We totally support this initiative,” the GEG executive said. “At 21 residents will be more mature, so it will be more appropriate for them to play in a casino.”
Francis Lui said the measure “would not affect” the flow of customers “that much” but called on the government to make plans for the human resources shortage.

Next steps


The Cotai resort is not completely finished, with its private club and restaurant China Rouge, inspired by 1930’s Shanghai ‘still under development’.
“We will be announcing the opening date very soon,” Mecca added. In September GEG will also launch a nine-screen, 3D multi-purpose cinema.
Galaxy Macau only takes up one third of the area granted by the government in Cotai and the company is already looking at the future. “We have never stopped planning,” Francis Lui said.
The company had until 2019 to develop the block and Robert Drake is confident it will be fully developed by then. “We have very strong views on what our next step should be,” he said.
“To do everything in one piece would mean that it could quickly become obsolete,” Francis Lui stressed. “The profile of our customer has changed so much in the last five years.”
“We want to be sure about what the customer wants,” he said. GEG prefers to “retain flexibility to cater for the changing needs of customers,” the executive explained. “At the appropriate time we will make an announcement” on future projects, he promised.

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