NEW YORK - Galaxy Macau, the global casino
capital's first new resort in two years,
represents a great leap forward for parent company
Galaxy Entertainment Group. The HK$14.9 billion
(US$1.9 billion) Asia-themed property that opened
on Sunday presents an opportunity for Galaxy to
enter Macau's top echelon with a welcome spirit of
innovation.
"Finally a casino with some
ideas," HSBC senior gaming analyst Sean Monaghan
said during a tour of the facility. "This is a
generation leap ahead of the other Macau resorts."
More than 95% of Macau's tourists come
from Asia, and Galaxy Entertainment Group (GEG)
has designed a resort catering to them.
"From the beginning, our vision has been
to develop and operate a
resort that delivers both
international-caliber standards but also captures
the heartfelt service culture and unique flavor of
Asia - something we call 'World Class, Asian
Heart'," GEG founder and chairman Lui Che Woo
said.
"This is especially critical for
success in a market where Asian travelers are so
dominant. In this way, we can make guests from
around the region feel right at home, whilst at
the same time provide an authentic Asian resort
experience for visitors from around the world as
well."
Galaxy Macau uses elements of
Southeast Asian architecture to animate the theme.
Buddhist stupas atop its two broad, golden towers
add an air of the exotic to the property, located
next to Sands China's Venetian Macao, at the
northeast corner of the Cotai resort area.
Night-time lighting creates a dramatic entrance to
Cotai from the west.
Asia hands,
brands The Asian feel extends to the
interior with more than just architectural
touches. Galaxy Macau's three hotels, with 2,260
rooms when fully operational, are all Asian:
Galaxy's own brand, Singapore's Banyan Tree, and
Japan's Okura. The last could be a bid to expand
the Japanese market, which accounts for barely 2%
of Macau visitors during the best of times. But
Okura more likely aims at other Asians, who see
Japan as the region's style and fashion
trendsetter, including Chinese.
More than
half of the resort's 50-plus dining outlets serve
Asia food. Fine dining options include Cantonese,
Indian, Japanese, Korean, and Chiu Chow (spicy
southern Chinese), plus an oyster bar. Once again,
Macau's local flavors, Macanese fusion and
Portuguese, go unrepresented, but the resort is
steps away from Old Taipa Village, a traditional
area with an array of eating choices.
For
sophisticated tippling, Galaxy Macau boasts a
Scotch whisky bar and a sake bar, with
world-renowned sommelier Jeannie Choo Lee
overseeing all of the resort's wine selections.
China Rouge, a nightspot created by Hong Kong
designer Alan Chan to evoke a modern vision of
1930s Shanghai, is due to open in September.
Life's a beach More than 13
million mainland Chinese visited Macau last year,
representing 52% of total visitors. Mainland
tourists are likely to increase as China builds
out its high-speed rail network to reach Macau's
neighboring cities. Meanwhile, according to Galaxy
investor relations director Peter Caveny, more
than 20 million mainlanders visited Hainan, the
island province to the southwest of Hong Kong
known as China's Hawaii. So Galaxy Macau is
building a beach.
The resort has the
world's largest rooftop wave pool, with swells
reaching heights of 1.5 meters, and 350 tons of
white sand. This so-called Grand Resort Deck
includes five more swimming pools, cabanas,
gardens, and a pavilion for Japanese tea
ceremonies.
The casino that pays for it
all opened with 450 tables and 1,100 gaming
machines. It can be expanded to more than 600
tables and 1,500 machines.
"Whether the
size is just right or the design is just right,
it's a very usable resort that is very polished,"
Monaghan observed.
In September, Galaxy
Resort will premiere a nine-screen cineplex, part
of a HK$600 million entertainment complex. Aside
from what the theaters do for GEG, they will be a
welcome driver of traffic to Cotai for
middle-class Macau residents who don't gamble and
can't afford the luxury brands on offer in casino
malls. When completed, Galaxy Macau will total
550,000 square meters, but it will only occupy a
fraction of GEG's Cotai lot, leaving plenty of
room for expansion of the resort or introduction
of a new concept.
Galaxy Macau is the
third integrated resort in Cotai, joining Venetian
Macao, opened in 2007, and Melco Crown
Entertainment's City of Dream, opened two years
ago. Those properties have helped put Cotai on the
map. Sands China will likely open its four-hotel
resort on Lots 5 and 6, south of City of Dreams
and across Cotai's main boulevard from Venetian,
next year, moving this landfill joining Macau's
outer islands closer to critical mass as an
entertainment destination.
Finding
time The timing of Galaxy Macau's opening
is nearly perfect. Last month, Macau set a new
record for gaming revenue, 20.5 billion patacas
(US$2.56 billion). For comparison, the Las Vegas
Strip's gaming revenue totaled US$527 million in
March, the latest month available. April marked
Macau's third consecutive gaming revenue high, and
the past seven months have recorded the seven
highest gaming revenue totals ever. For 2011,
gaming revenue is up 43% from last year's record
of US$23.5 billion.
The timing is no
accident. The project dates back to August 2004,
when GEG announced it would be begin work on the
Cotai resort. After getting underway, construction
was delayed several times as GEG judged whether
the market was ready for the property. They seem
to have gotten that part right.
Whether
Galaxy Macau and its new ideas will work is what
matters now. In the midst of Macau's boom, GEG
profits fell 18% last year. GEG has always had
ideas. It was one of the three original gaming
concession winners, teamed with Las Vegas Sands -
Sands China's parent company - but the partnership
broke up, leading Macau to create sublicenses so
that both companies could operate casinos.
New to the game The only
licensee without any background in gaming, GEG was
the first of the newcomers to open a casino,
breaking Stanley Ho's 40-year monopoly.
Rather than build its own facilities, it
put casinos into existing hotels and even changed
office space into betting space. Grand Waldo
features Macau's only topless bar at a casino,
populated with eastern European dancers. Its
downtown StarWorld resort opened in 2006 with the
best casino bar in town and a far more
approachable gaming floor than the overwhelming
grand halls.
As good as they may be, none
of these ideas spelled success for Galaxy. The
group has remained mired at or near the bottom in
gaming revenue, competing with neighbor MGM Macau.
StarWorld emerged as a high performance VIP
property with lagging mass market performance.
Other GEG casinos barely register.
"This
is a transformational property for Galaxy
Entertainment Group," HSBC's Monaghan said of the
Galaxy Macau. "Prior to opening of this property
GEG really only operated one casino, StarWorld. If
you were to compare before and after across the
key metrics, it really highlights this
transformation."
By his estimate, Galaxy
Macau will more than double GEG's revenue, triple
its earnings before interest, taxes, debt and
amortization (EBITDA), more than triple its
employees and hotel rooms. "This is really a big
deal for GEG, and that's why its stock has
performed so strongly over the past 12 months."
GEG shares trading on the Hong Kong market
have risen from HK$3.57 a year ago to trade at
HK$13.88 on Tuesday. But that's just betting that
GEG has another good idea in Galaxy Macau. The
real test and the hard work began Sunday.
Macau Business magazine special
correspondent and former broadcast news producer
Muhammad Cohen told America’s story to the
world as a US diplomat and is author of Hong
Kong On Air, a novel set during the 1997
handover about television news, love, betrayal,
financial crisis, and cheap lingerie. See his blog
and more at MuhammadCohen.com.
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, a novel set during the 1997
handover about television news, love, betrayal,
financial crisis, and cheap lingerie. See his blog
and more at 
