Diversification of the Macau tourism market is challenging because Chinese customers at the city’s large casino resorts “overwhelmingly” want gaming products, a senior industry executive told a panel session at Global Gaming Expo (G2E) Asia 2016 on Tuesday.
“The Chinese-oriented consumer has been demanding gaming product – overwhelmingly,” said Andy Choy, chief gaming officer for Melco International Development Ltd. The firm is an investor in Macau casino operator Melco Crown Entertainment Ltd, operator of City of Dreams, Altira and Studio City properties in Macau.
He was speaking at the conference session of G2E Asia, ‘Regional Market Trends and Dynamics – Impacts of Locals, Junkets as Developers and Developing Entertainment?’. The three-day casino industry trade exhibition and conference, G2E Asia 2016, runs until Thursday afternoon.
Currently, most of Macau’s visitors come from mainland China. In 2015, a total of 66.5 percent of Macau’s 30.7 million visitors were from mainland China, according to Macau government data. Visitors from Hong Kong made up a further 21.3 percent of the total.
Under the Macau government’s proposed Five-Year Development Plan – a recently-announced package of social and economic policies covering the period 2016 to 2020 – the authorities want to see non-gaming revenue at the city’s casino resorts rise as a proportion of all revenue.
By 2020 the Macau government wishes to see such non-gaming revenue account on average for at least 9 percent of all revenue generated by casino operators, compared to an estimated 6.6 percent in 2014.
“In an environment where you are motivated purely by satisfying your customers, that would dictate that you would spend your investment dollars primarily on the gaming product,” stated Mr Choy.
“But in this jurisdiction [Macau] and in many jurisdictions in the area, the government has deemed that they would like to see more non-gaming attractions and amenities as a prerequiste for the granting of the licences. And so as an operator you comply with that,” he added.
The Macau government’s “mid-term” review report of the local casino industry – disclosed on May 11 – shed no light on the possible refreshment of Macau’s six gaming concessions and sub-concessions.
The mid-term review began in May last year. It covered nine topics related to Macau’s gaming industry, namely: its economic impact on Macau; its impact on small- and medium-sized enterprises; its impact on Macau’s society; the relationship between the gaming and non-gaming sectors; whether gaming operators were complying with the terms of their existing concession and sub-concession contracts; human resources management; whether gaming operators were fulfilling their social responsibilities; legal compliance; and management of VIP gaming promoters.
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”We will continue to develop the Studio City Phase 2 and City of Dreams Mediterranean as planned, before other discretionary capital expenditure spend”
Chairman and chief executive of Melco Resorts and Entertainment