MACAU – Figures due this week are expected
to show that Macau is bigger than Las Vegas. The
former Portuguese enclave in China raked in
US$10.4 billion in gaming winnings in 2007,
virtually matching the 2006 take for Clark County,
the Nevada jurisdiction that includes Las Vegas
and surrounding areas.
If Macau misses in
the 2007 data, it’s only a matter of time before
it leaves Las Vegas twinkling in its rearview
mirror. Macau already far outearns the famous Las
Vegas Strip, even though the Strip has a 50%
advantage in the number of both visitors and
casinos. Minimum bets in the Chinese territory
usually set at HK$100 (US$12.85), compared with a
less than US$1 in some Vegas locations, allow
Macau to take in far more per customer and per
table
than Las Vegas.
Three of the biggest names
in Las Vegas - Wynn Resorts, Las Vegas Sands
(owners of the Venetian), and MGM Grand - have
built mammoth properties that would fit right in
back in Vegas. But size, whether it’s your square
footage or bankroll, isn’t everything.
"We
were just in Las Vegas and this isn’t Vegas," an
American engineer living in Taiwan (name withheld
by request) says in the midst of the Venetian’s
seemingly endless, teeming casino floor. His
Chinese wife enthusiastically concurs. "Is there
more to it, outside?" she asks, hopefully.
Similarities are different Those
comments highlight danger signs for Macau as it
tries to expand its market beyond day-tripping
gamblers from mainland China and Hong Kong. Its
vast new properties need regional and long-haul
guests looking for a broader vacation experience.
Ultimately, it’s not Macau’s similarities with Las
Vegas but its differences and its skill in
emphasizing and exploiting them that will
determine its success in attracting those guests.
That’s partly because even Macau’s similarities
with Las Vegas mask big differences.
For
its earliest days, Las Vegas had top stars on its
stages (and at its tables and cocktail lounges).
Particularly since the 1980s, Vegas hotels
expanded from their original desert themes and
from the basics to include world-class shopping,
gourmet dining, full-scale theater productions,
galleries, museums, clubs and more.
Casino
resorts in Vegas now earn half of their revenue
from non-gambling activities, said Bill Eadington,
director of the Institute for the Study of
Gambling and Commercial Gaming at University of
Nevada, Reno. "Given that Macau is building on the
Las Vegas Strip mega-casino model, I expect it
will try to follow the same approach," the
economics professor said.
Basically, none
of the above evolved in Macau during the 20th
century, and there’s skepticism about whether the
Las Vegas model would work in Macau. When the
Sands Macao opened four years ago, the casino was
mobbed and its upscale restaurants empty - they’ve
now been removed, in favor of more gaming tables
and downmarket eats. Macau’s average stay per
visitor and average spending have remained
stubbornly steady despite expanded temptations and
doubled visitor numbers over the past five years.
"Macau has built properties based on Las
Vegas’s 30 years of experience, but the Chinese
market doesn’t have any experience with the Vegas
product," Andy Nazarechuk, dean of the University
of Nevada Las Vegas-Singapore’s William F. Harrah
College of Hotel Administration, said. "Once they
learn, there will be money to be made."
In
Macau, the non-casino attractions have barely
begun. The Venetian, Macau’s first Las Vegas-scale
integrated resort, includes big name shopping in a
200-plus unit mall, Asia’s largest convention
venue, and the Venetian Arena, the 15,000 seat
arena that’s already hosted Beyonce, Black Eyed
Peas, the Cleveland Cavaliers of US basketball,
and Pete Sampras’ victory over Roger Federer in a
tennis clash of the ages.
Not ready for
prime time? The Venetian’s international
drawing power is broadening Macau’s visitor base,
but at this stage that may create more problems
than it solves. The curtain has yet to rise on
Cirque du Soleil at the Venetian and similar shows
at other venues, and a range other entertainment
on the drawing boards.
The Venetian is the
first property in Cotai, the landfill connecting
Macau’s two outer islands that’s planned to be its
version of the Las Vegas Strip. Right now, there’s
nothing but the Venetian and a lot of construction
cranes, steel frames and moved earth. Many guests
must get the impression they have been dropped -
to pick up the Las Vegas desert metaphor - at the
single oasis in a vast wasteland, although they’re
just minutes away from a full dose of Macau’s
east-meets-west charm.
There’s a different
aesthetic at work in Macau than in Las Vegas. Here
mainland tourists happily snap photos of the
Venetian’s fake European historical buildings
rather than photograph the genuine 16th century
articles in Macau’s historic center. "We prefer
fake things," a Chinese friend said, noting that
Asia is the land of the Rolex and Louis Vuitton
knockoff. But in Macau they don’t get the joke on
the biggest fake of all.
Las Vegas is the
land of the Elvis Presley impersonator, deeply
rooted in kitsch back to the early desert motif
hotels: The Sahara, The Aladdin, The Sands, and
celebrating the high priestess of American
tropical tackiness, The Flamingo. The next
generation progressed from Circus Circus and
Caesar’s Palace to kitsch on steroids with scale
models of the Sphinx, the Eiffel Tower, New York
skyline, and Venice. Even though operators like
Steve Wynn have brought modern masters’ art,
Michelin star chefs, and designer labels to Vegas,
the socio-cultural baseline remains Elvis’s peanut
butter, bacon and banana sandwich. There may be
serious money and serious events there, but no one
takes Vegas seriously.
Macau’s copies of
Vegas imitations are not presented as punchlines
of an elaborate joke but as genuine luxury
articles. Singapore, which is building up its own
nest of casinos, recognized the danger. It
insisted that the proposals for its two casino
resorts be original designs and specifically
prohibited imitations of other destinations.
Runway fashion The Venetian
Macao is undeniably a marvel. The world’s
second-largest building (behind Boeing’s plant for
assembling 747s), built to suck through
100,000-plus visitors daily and leave them
fractionally poorer while treating them to
gondoliers paddling through indoor canals,
handpainted frescoes on the ceilings, and the
chance to walk away as millionaires, or at least
live for a while as if they were.
But the
Venetian shares less with an exclusive resort
destination than it does with an airport, right
down the Samsonite and See’s Candies outlets.
Parts of the Venetian (just like the platinum
lounges at airports) are sumptuous but overall it
feels overwhelming and isolated. Once inside the
Venetian, it seems impossible to get out. It also
seems as if there’s nowhere to go, exactly the way
management wants it. Yet the Venetian is within
walking distance of Taipa Village, one of the most
engaging sections of Macau, embodying its 500-year
legacy of Chinese and European cultures.
Instead of its fakes, no matter how
fabulous, Macau should be promoting its real
heritage as a crossroads between east and west in
a relaxed setting more like southern Europe than
southern China. Putting the spotlight on that
heritage would spread spending beyond the casino
resort fortresses to keep homegrown businesses
happy.
More importantly, it would
differentiate Macau among destinations as gaming
spreads in the region. Within two years, Singapore
will have a casino resort by the creators of the
Venetian in a unique high-rise package, and
another by Malaysia’s Genting/Star Cruises on a
beach resort island featuring a Universal Studios
theme park. Malaysia, Cambodia and South Korea
already have casino resorts, as does Australia.
(Like Vegas, all are particularly friendly to
Chinese players.) Vietnam, Thailand and Japan are
seriously considering getting into the business.
What will set Macau apart aren’t gambling
and Vegas imitations, but its unique Mediter-Asian
heritage. Macau’s real success, big enough to
justify the billions invested, won’t be Asia’s Las
Vegas but as the world’s only Macau.
Former broadcast news producer
Muhammad Cohen is special correspondent for
Macau Business and author of Hong Kong On Air
(www.hongkongonair.com), a novel set during the
1997 handover about television news, love,
betrayal, high finance and cheap lingerie.
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