AGS | Macau is in the midst of the same diversification process undertaken by Las Vegas 15 years ago - Gaming researcher

Macau is diversifying its entertainment offerings in a process similar to that followed by Las Vegas some 15 years ago, albeit still retaining a focus on its main Chinese clientele and target audience, a gaming researcher from the University of Nevada, Las Vegas International Gaming Institute told MNA

Taipei (MNA) – A gaming researcher from the University of Nevada, Las Vegas (UNLV) International Gaming Institute told Macau News Agency (MNA) that she has observed the city undertaking a similar diversification of its gaming industry, closely following in the footsteps of Las Vegas some 15 years previously, but in a way specifically tailored for the needs of its Chinese target audience.

“Las Vegas has gone through a large shift and if you see, historically, what has happened with Macau we actually see somewhat similar trajectories […] It’s a bit harder to see that in Macau because so much money is seen in the gaming side for revenues but there is certainly growth in non-gaming amenities for the SAR. The growth rate for non-gaming is in many cases as high, or higher, than gaming revenues,” said the Director of Research at the UNLV International Gaming Institute, Brett Abarbanel.

The gaming researcher made the remarks at the Asia Gaming Summit being held in Taipei, Taiwan, between November 6 and 8.

According to Ms. Abarbanel, since the US economic recession of the mid 2000’s, Las Vegas’ alternative entertainments like meetings, incentives, conferences and exhibitions (MICE), nightclubs, or eSports, began to eclipse the gaming side in terms of nightlife – from clubs to bingo halls – and show venues started commanding more of the spotlight.

“As we started to bring more to those casino resorts, we began seeing more of that disposable income going to those different amenities. It’s something we’re already seeing in Macau and I believe will continue to see […]  I know that the Sands Arena has been quite successful and a lot of the new shows we’re starting to see across the properties in the city. Not just in Cotai, but also in Macau proper,” she added.

According to data from brokerage firm Morgan Stanley, in gross revenue terms, Macau’s non-gaming revenue – excluding satellite property venues – amounted to around 12 per cent of Macau operators’ gross, still a far cry from the 65 per cent share non-gaming represents in Las Vegas.

The total non-gaming spending of Macau visitors went up by 16.4 per cent year-on-year to MOP61.32 billion (US$7.6 billion) in 2017.

Ms. Abarnabel added that while previously, non-gaming amenities would be assessed by how much they contributed to gaming income, in the last five to seven years they started to be viewed “not just as a complementary driver, but a successful vertical”, and that Macau’s diversification will always stay closely in step with the needs of its main Chinese clientele.

Of the 32.6 million visitors that came to Macau in 2017, about 90 per cent were from mainland China, with almost half coming from Guangdong province.

“The fact the main clientele is overwhelmingly Chinese is not a drawback for Macau but it definitely means it must follow a different path with regard to marketing or diversification. Las Vegas has long marketed itself as an escape opportunity. What happens in Vegas, stays in Vegas […] Macau has not tried to define itself as a place where you go to have a crazy time and no one will hear about it,” she added.

“We are seeing the diversification in Macau but in a differentiated form. [Diversification] is not a box set in that what happens in Las Vegas is replicated in Macau and expected to work properly. To do that would be foolish, without looking to the local dimension, because the target market is quite different”.

*Reporting from Taiwan