Joanne [email protected] Galaxy Entertainment Group (GEG) Senior Director of Business Development, and Director of Operations of Broadway Macau and City Clubs, John Au, told Business Daily that the newly opened Broadway Macau is the kind of project that’s never been seen before in the SAR. Despite the headwinds in the gaming industry, he expressed his utmost confidence in a project designed to target the mass market via better services, retail, various choices of F&B, entertainment and family fun. Broadway is integrated into the Galaxy Entertainment Group (GEG) casino-resort property. How are you going to distinguishing yourself in terms of the mass market? Actually, Broadway is [the kind of] project that has never been seen before. First of all, we’re creating a so-called open air hawker-style food street. That’s something Macanese people and most of visitors want. And we’re presenting a lot of entertainment, live music. In particular, we’re presenting a mobile stage called band on the run. The main purpose of it is to promote live music in Macau. No-one has done it ever before. On top of that, we’re adding to Broadway Macau a theatre called Broadway Theatre which can house around 3,000 people, and we’re putting on a lot of major shows and performances. You can say that Broadway Macau is well positioned to cater to the mass market because of the offerings, and offerings that have never been seen in Macau before. Broadway Macau has stressed that it’s actively co-operating with local SMEs. How did this come about? As I said, the original concept of Broadway Macau is to offer something that has never seen in Macau before. As a tourist, we always come to Macau for the delicious food, for the small shops around the corner. But as a tourist, normally you don’t have too much time to go through all of them. We thought if we had the chance, if we could create something like a food street that can house all these restaurants under one roof, wouldn’t that be wonderful for all the tourists? When we bought the property, we saw there was this so-called inner street that hadn’t been fully utilised. And we thought that maybe we could turn that into a food street. After talking to our engineering people to make sure the concept was O.K. we started to talk to our local small and medium-sized enterprises (SMEs) and they all welcomed the idea very much. The other thing is that we are also responding to the government’s initiative to meet the SMEs and share the growth of the economy by participating with them. So that’s when we talked with them; most of the major local brands are very appreciative of the opportunity and they joined right away. What practical measures did you employ to facilitate them? We’re helping them with a fair rate of rent. But I think the most important thing is that we’re helping them resolve major operating issues, such as marketing – we have a very good marketing team, led by Kevin Clayton – and we can provide a lot of entertainment on the street which if you’re an operator around the corner, you won’t be able to offer to your customers. We can help them to market their products in the PRC (People’s Republic of China) – it’s much more beneficial and advantageous than doing it alone. Also, we’re helping them in the cleaning, and also helping them on the finance. We’re also helping them with advertising. The major idea is not just to help them financially; we also want them to grow and to operate professionally so that they’re able to grow their brand and size in the future. What about the Broadway Theatre? Are you competing with Cotai Arena? I don’t think we’re going to compete and I don’t want to use the word ‘compete’. I think we’re trying to grow together, and hopefully, we’ll be able to grow the [market] together. We know that one or two performance venues are dedicated to this in Macau right now. I think we’re creating this to supplement to compliment the needs of the market, and satisfy the needs of customers. We know that our positioning is different to that of The Venetian’s. But our venue doesn’t only entertain music lovers but also sports fans – we can also hold ball games, such as volleyball, and athletic events, such as boxing. It’s a multi-purpose theatre. We’ve arranged the shows for July and August, mainly first-class Asian singers. And later this year, we’ve already invited a famous Japanese magician to perform. What about the gaming side of the property? We’re putting in 38 tables – 10 in premium mass and 28 in the mass market – and 98 machines. The major attraction of Broadway Macau Casino is that it’s the only casino in Macau with a view. It’s located in the old hotel lobby area, if you recall where the old hotel lobby of the Grand Waldo was. We put the casino there. And it’s facing the river, with a fantastic panoramic view of the river. One of the major features is that there would be natural light coming into the casino during the daytime. Are there any new offerings in terms of gaming? We’ve constantly been talking with the supervision department in terms of what new games can be put into the casinos. For example, we now have Live Multi Game System, with one Baccarat, one Black Jack, one Sic Bo. Customers can bet on all these games through the machine and don’t need to walk around. We’ve been visiting casinos abroad. Actually, the games offered everywhere [else] are more or less the same. There are some virtual dealer machines in Broadway Macau Casino. Is this a trend? There are virtual dealers on the monitor handing out cards or whatever. Those are counted as slot machines. They are not what we usually call gaming tables. Gaming table need a real person croupier. Do you think these electronic machines will replace real gaming tables? There is this trend but it cannot be fully substituted because most of customers want to communicate, participate and interact. Especially on high-limit games, they love the feeling of seeing a real card being handed out in front of them and they enjoy the process of checking the card themselves. They enjoy the process and we need to offer them the right to enjoy that process, especially the VIPs. The Macau Government has proposed a cap on Mainland tourists coming to Macau. Is the management of Galaxy concerned? We aren’t concerned. I think the government is only consulting whether we would be able to do better to help serve the customers. If not, why do we need more customers? I think that’s the major question to ask. In addition, we have been putting a lot of effort into South Asia, Southeast Asia and North Asia to develop the markets there. We think Macau can also diversify its source of visitors. What are your expectations of the development? We are very confident in the product. Even if we’re now seeing a downturn in the economy and gaming revenue, we’re very confident that our offerings will be well received by our customers. Because we’re seeing the market is actually shifting away from a VIP focus to a more mass market focus. Not that VIP is not important but we are seeing a new norm. Also, more and more middle class customers are coming to Macau on a daily basis. That’s why we’re confident that the offerings of the three new hotels – namely, The Ritz Carlton, JW Marriot and Broadway Macau – in addition to the restaurants and retail, on the Promenade, where most of the brands will be, will be able to sufficiently satisfy the needs of our customers. The prices we charge are very reasonable, as well. For example, The Ritz Carlton room rate is around HKD4,000 and Broadway is around HKD1,000, which is around 800 yuan. And all hotel guests can enjoy all the facilities, such as the Grand Resort Deck and Skytop Aquatic Adventure River Ride. But the Grand Resort Desk – unlike some other non-gaming facilities in other operators’ properties – are only reserved for your hotel guests. Why is that? We need to consider the capacity of the Grand Resort Desk. After all, it’s been built dozens of metres above the ground. Actually, we have entertained local residents through by co-operating with some local chambers of commerce and associations. But they need to make reservations. Broadway Macau is a renovation of the old Grand Waldo. Will we see more of this transformation happening in Macau? Actually, we’ve seen a lot of these in Macau already, such as seeing commercial or residential buildings turned into casino-hotels. It’s actually very hard, much harder than just building a new one. If there is this possibility, I suggest [various parties] build a new one instead of renovation. When we purchased the Grand Waldo, we saw two major advantages that were not fully developed, which are the inner street and the location of the casino. We’ve changed that already and hopefully we will draw more customers. Despite your confidence, what are the major challenges to be addressed? I think the challenge is how we could do better. We cannot expect the market to grow phenomenally, at a 20 per cent or 30 per cent basis annually. This is abnormal. Nowhere in the world have you seen a single industry grow like that before. People now are always comparing with what we did last year. Of course, there’s going to be a significant difference if you compare the results of these two years. But then, if you compare the second half of this year with the first half of this year, you will be able to say “Oh, Macau is coming back!” Because the base was so high last year, we were not able to deliver (the same). People say Macau’s gaming business is considered to be a bubble industry but it’s just a cycle; you can see the cycle going up and going down, it’s like a rollercoaster. Most businesses are the same. You have to go through a cycle of uphill and downhill. I think it’s very normal to see we’re getting back on track and steadily growing. That’s what we’re hoping for. Many analysts see the opening of Galaxy Phase II and Broadway Macau as a turning point for the gaming market in Macau. What’s your point of view? I do believe that we’re entering some headwinds in the market but I think the market will recover, as the six concessionaries can work together and put in more effort to provide more facilities for our customers. I believe Galaxy Macau, combined with Broadway Macau, will be able to serve our customers better. That’s why we’re very confident that once we put this product on the market, we’ll be able to see more customers coming to Macau. The Macau Government is launching its mid-term review of the gaming concessions. Do measures such as attracting more visitors and co-operating with local SMEs particular efforts to meet the requirements of the review? I would say no. As whole, it’s Galaxy Entertainment Group’s vision that we work with the local SMEs, associations and general public and dedicate what we have to achieving the sharing of our success. We have been helping SMEs and working with quite a lot local enterprises in StarWorld Hotel when we first set up, also in Phase I restaurants, and F&B. Apart from that, we’ve actively participated in sponsorship, such as some very reputable sports activities like the Marathon – we are the title sponsor of the Macau Marathon; we are also the title sponsor of the Macau Volleyball [championship]. We’ve made quite a lot of contributions to the local community, too. Many industries in Macau are facing a human resources issue. With many new properties opening, many new people need to be brought onboard. How is GEG addressing this? I think that’s everybody’s issue. Macau, after all, has a very small population with 600,000 people and the unemployment rate is 1.7 per cent. In an economic sense it actually has full employment. We are very thankful to the Macau Government for helping out in terms of resolving the labour issue for us. Without the Macau Government, we wouldn’t have been able to open this property. How do you feel about being in charge of the Broadway Macau project? I’m delighted that I’ve been given the chance to look after the Broadway project because this is also something I’ve never done before. I started working for the K. Wah Group – the parent company of GEG – in 1994, so it’s been about 20 years that I’ve been with the group. I came to Macau in 2003, about 12 years ago. The first job I has when I arrived was as an HR (Human Resources) person. It’s hard to imagine. When I came in 2003, we were only setting up the company at that stage so we had less than 10 people in the office. It was just me, Mr. Lui (Francis Lui Yiu Tung) and a few other colleagues. The first project that I did was the establishment of the Waldo Casino, setting it up and getting it open. And then afterwards, there were Rio Casino, the President Casino, the Grand Waldo Casino, then StarWorld, then Galaxy Macau Phase I and Galaxy Macau Phase II and Broadway. In terms of these ten years, I’ve work in various departments, like the HR department, the Public Relations department, the Government Relations department and then I finally settled in the Business Development Department, which is the department responsible for VIP business. After that, the company asked me to look after the Broadway redevelopment project. That was about two years ago after we took over the land from Grand Waldo. So here I am, still a young man! [QUOTE] I do believe that we’re entering some headwinds in the market but I think the market will recover, as the six concessionaries can work together and put in more effort to provide more facilities for our customers. I believe Galaxy Macau, combined with Broadway Macau, will be able to serve our customers better. The major attraction of Broadway Macau Casino is that it’s the only casino in Macau with a view – a fantastic panoramic view of the river. The other major feature is that there would be natural light coming into the casino during the daytime
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