Macau casino concessionaires have been asked to invest billions of U.S. dollars into non-gaming activities and in bringing in more customers from overseas, but for the city to be able to attract a greater number of international tourists, it needs to create a “visitor experience ecosystem” that encompasses a number of stakeholders.
That is according to Frank McFadden, chief operating officer for gaming and hospitality at SJM Resorts SA, the Macau-based concession-holding entity of SJM Holdings Ltd.
“We need to improve the experience for international visitors, and that only works if we have an ecosystem that ensures a harmonious experience,” stated Mr McFadden.
“All the elements, from service providers, to transportation, operators and government need to work together to ensure that the ecosystem works and provides a memorable experience” to visitors from overseas, he added. “If one of the parts doesn’t work, the entire ecosystem doesn’t function, despite the individual efforts.”
Mr McFadden was speaking on a panel titled “Pioneering a new Macau”, part of the summit of the MGS Entertainment Show 2023, a casino industry trade exhibition and conference taking place in Macau.
As part of the requirements for the current gaming concessions, the Macau government had asked applicants to work to increase the number of overseas customers served by the city’s casino resorts. The 10-year term of those concessions started on January 1.
Macau’s six casino concessionaires have in aggregate committed to invest MOP118.8 billion (US$14.9 billion) over the course of the permits, with about 91.5 percent – or MOP108.7 billion – to go into non-gaming initiatives.
Hubert Wang, president and chief operating officer of MGM China Holdings Ltd, suggested during the panel session that the operators will have to “tweak and adjust” how they make their respective investments throughout their 10-year concessions. That was in order to “accommodate eventual new trends, challenges and opportunities” that might come up during that period, he said.
“Macau has been doing quite well since the end of the pandemic,” said Mr Wang, adding that operators were aligned with the Macau government’s efforts to diversify the city’s economy, namely via offering more non-gaming elements.
Wilfred Wong Ying Wai, president and executive director of Sands China Ltd, said increasing the duration overnight stays would be an essential element in boosting the city’s tourism industry.
“We’ve updated our offering with new room products” at the Londoner Macao complex, with the average number of nights for overseas visitors now above the previous range, observed Mr Wong.
The executive also said Sands China had about 80 staff in offices across eight different tourism source markets, including South Korea, Japan and Hong Kong, “to promote Macau as a tourism destination and entice visitors to spend more time here”.
Non-gaming, diversification
During the panel, Craig Jeffrey Fullalove, chief financial officer and chief administrative officer at Wynn Macau Ltd, noted that such investments also took into consideration the “significant shift in the market” in terms of customers “that are younger and affluent”.
“We’ve certainly shown commitment towards the goals of non-gaming, economic diversification, and driving more international tourism,” stated Mr Fullalove.
He added: “For us, it’s about focusing on those key capital projects so that we can create a return on investment over an elongated period of time, via non-gaming elements that are going to drive meaningful footfall and visitation to our properties.”
Buddy Lam Chi Seng, executive vice president for the corporate office at Galaxy Entertainment Group Ltd, highlighted the new offerings at the company’s flagship property, Galaxy Macau, as part of the firm’s drive to expand non-gaming revenues.
Although the return on investment for non-gaming projects is not as high as in the gaming segment, “it might attract more and different customers, who will eventually stay longer in the city and contribute to the growth of the Macau tourism market,” said Mr Lam.
One such example, said Sands China’s Mr Wong, was the hosting of concerts in Macau, which were a “crucial part” of the strategy to attract specific customers, such as people from Hong Kong.
“Operators have adapted their strategies to cater to a younger generation and more families, to match to a new pattern of consumption,” noted Mr Wong.
He added that in the case of mainland consumers, “about 40 percent of the visitors in the post-pandemic period are in the ages of 25 to 40, who like to explore a new destination and enjoy a more diversified offering.”
Raymond Lo, senior vice president and property general manager of Altira Macau and Mocha Clubs, at Melco Resorts & Entertainment Ltd, said during the session that the city’s operators had been “careful” about their investment plans, as a way of implementing some capital projects that would support the non-gaming initiatives.
“We’ve expanded our sales offices in various markets and adjusted marketing strategies, supported by the launch of innovative products and offerings to match the interests of a younger generation,” said Mr Lo.
MGM China’s Mr Wang said the concessionaires should “avoid overlaps” regarding the investment plans, to make sure that each operator plays to its own strengths.
