New Cotai names new boss

New Cotai named Walt Power as its new Chief Operating Officer.  In the company’s press release, the company had (obviously) nothing but glowing things to say about the new senior executive:

 ”Walt is truly a unique individual with operational and management experience that is very difficult to find, and we are delighted that he has chosen to join our growing enterprise,” said David Friedman, Chairman and CEO of New Cotai Holdings.
“Our company will benefit tremendously from Walt’s experience and renowned leadership abilities, and he will be especially helpful with our current project, Macao Studio City. His Macau experience will help to ensure that our Macao Studio City casino project will open smoothly.”
Mr. Friedman said “New Cotai plans to grow and to develop additional properties around the world. With his extensive international experience, having held executive positions at casino resorts throughout the world, Walt is a valuable addition to our senior management team. ”

Galaxy Casino’s rating cut

S&P lowered its rating on Galaxy Casino SA from “positive” to “stable”.   In its report S&P said:

S&P said competition among operators, which currently own a total of 29 casinos, will continue to increase significantly. Competition will be particularly intense in 2009, when more casinos are due to open — either before or after Galaxy’s integrated casino and entertainment resort, Galaxy Cotai Mega Resort opens on Macau’s Cotai strip.

Macao taking Vegas customers

Why travel to the US when you can stay in your own backyard?  Apparently alot of Asians are starting to feel that way.  Heres an article fromo the MacauDailyTimes discussing how Las Vegas is starting to feel some pressure from Macao and the Cotai Strip.  Its a pretty long article so I just copyed the most relvant details.
MGM Mirage executives attributed a slower than usual Lunar New Year period in Las Vegas to new casinos in Macau and North East Asians deciding to stay closer to home during the holiday.

Company Chairman and CEO, Terry Lanni said during the fourth quarter earnings’ call yesterday that his venues had seen a larger than usual number of North Asians during the Western New Year but less during the Lunar year change.

“After 31 years in this business, and having been involved with Caesar’s and here at MGM Mirage … something very strange happened this year,” said Mr Lanni.“A significant amount of our North Asian customers from Taiwan, Hong Kong, and People’s Republic of China came in over that Western New Year’s period, which is normally not the period of time in which they tend to visit.
“This is anecdotal but, looking at our numbers and hearing other numbers in Macau, I think a number of people in that part of the world, North East Asia, if you will, … tended to stay in the Macau area over the Chinese New Year’s period.”

It’s all about gaming
Contradicting a speech Pansy Ho gave visiting mainland and Hong Kong media on Thursday where she painted the resort as a place of fashion, fine dining and entertainment, rather than just a gaming hall, Mr Lanni said it was all about the casino floor.
“As far as the operation, as you know, there are four components in Macau that are significant,” he said.
“Rooms, food and beverage is not one of those four, or any of those four.”
He went on to describe his observations of the in-house VIP,  room-operating VIP, mass market slot and table games play since the venue opened.
Volume from the room or junket operators had exceeded expectations by up to 75 percent, he said, while in-house was down 40 percent on expectations. Mass market table games were down 15 percent and slot machine play down 35 percent on what executives had hoped.
However no actual figures were given on volume.

Cotai
MGM and Ms Ho are still working on securing land for a Cotai project and have submitted the necessary paperwork to the Chief Executive Edmund Ho Hau Wah, the MGM Grand Macau president Bob Moon told reporters on Thursday.

MGM Mirage chief financial officer, Daniel D’Arrigo said it may take as long as the rest of this year to finally secure the land, during which time the company will work on a plan for the site.
“The site is a great site in a good location, it’s not as big as say the Venetian site or some of the other sites in Cotai,” he said.
“But it’s about double the size of the site we have on the Peninsula, and it’ll probably be another high-end boutique type hotel.”

Cotai Strip

There is a really interesting post over at Trevor’s Cotai Strip blog that discusses whether or not Las Vegas Sands has the right to trademark the term Cotai Strip.

The two questions he has is:

• If Las Vegas Sands is claiming a trademark, then why do I see other companies and reporters using “Cotai Strip” so frequently?
• How can you a trademark an area of land – the Las Vegas Strip couldnt be trademarked, could it?

I couldnt agree more and this is something i’ve always wondered too.

Four Seasons Hotel Macao

Four Seasons announces its Macau hotel will open in June 2008.  This is a small hotel, but a big step for the Cotai Strip.  As more and more of these open, the Cotai Strip will get closer to achieving the critical mass it needs.

Here’s how the press release describes the amenities:

 The hotel offers 360 guest rooms, including 84 suites, all in contemporary design reflecting signature Four Season luxury and comfort. All amenities were chosen intuitively for your rest and relaxation, and latest technology is installed for prompt communication and exceptional entertainment.

Delicious entertaining options: Zi Yat Heen for Chinese cuisine; Belcanção for an all-day international buffet and modern Portuguese fare; The Pool Bar and Grill for snacks and sandwiches; The Lobby Lounge for casual cocktails; and The Blue Bar for fine cigars, wines and spirits.

Four Seasons Spa, soothing with skincare and massage in 14 private spa suites, adjoining vitality pools and an outdoor swimming pool, a fitness centre and yoga studio.

2,555 m2 (27,500 sq. ft.) of flexible function space – comprehensive for conferences.

Three floors of luxury designer-brand shopping; steps from the Cotai Strip Convention&Exhibition Center and the dedicated Cirque du Soleil theatre.

Macau’s changing junket operations

Many in the US may not be familiar with how the Macau junkets work, but it is a huge driver of revenues there. From the LVRJ:

A decision to change where some of Macau’s top junket operators bring their big-spending customers could be troublesome for Las Vegas Sands Corp. and Wynn Resorts Ltd.

Ten Macau gambling representatives signed a new agreement this month to take their high rollers to the Crown Macau, which opened in May. The casino is operated by Melco PBL, a joint venture between Australian tycoon James Packer and Hong Kong businessman Lawrence Ho, son of Macau casino pioneer Stanley Ho.

The $565 million Crown Macau is on Taipa Island, between the main casino cluster on the Macau Peninsula and the growing gaming operations on the Cotai Strip.

LVRJ article

http://www.lvrj.com/business/12923922.html

Galaxy Entertainment Interview in NY Times

Its good to see Galaxy finally getting alittle exposure in the US.  This is a must-read.

THE Galaxy Entertainment Group had no business entering the casino business when it made its bid for a gambling license in Macao, a Chinese territory west of Hong Kong.

Competing in Macao, after all, meant going head to head with Stephen A. Wynn, who practically invented modern-day Las Vegas, and the Las Vegas Sands Corporation, parent company of the Venetian, which over the last several years has opened two properties in Macao, including the world’s largest casino resort. This month, the MGM Mirage opened its giant Macao property.

And then there was Stanley Ho, the Hong Kong billionaire who for four decades held the territory’s only gambling license.

Galaxy, by contrast, was created in 2001 by the Lui family, a clan based in Hong Kong that for 20 years had been building office towers and residential buildings in China (and Hong Kong and the United States) but had no experience in the gambling business.

Yet Galaxy has managed to hold its own in a crowded market, capturing a 20 percent share of gambling revenues in a locale that surpassed even the Las Vegas Strip last year in terms of the money gamblers cumulatively lost. Macao, a Portuguese colony that was returned to China in 1999, is the only place in China where casino gambling is legal.

Galaxy, which went public on the Hong Kong stock exchange in 2005, operates the StarWorld Hotel and Casino in central Macao, along with smaller gambling halls around town. The company is building a giant casino resort that, when completed, will rank as one of the world’s largest.

Francis Lui, the company’s deputy chairman (the Hong Kong equivalent of chief executive), recently sat down for a breakfast meeting in New York, where he offered his views on Macao, the intensity of the Chinese gambler and why he thinks he will outsmart his more experienced rivals.

continue on with the interview

Should Vegas worry about Macao?

I firmly agree with this article.  Macao and the Cotai Strip will only help introduce chinese to American brands.

Should Las Vegas worry about this new source of competition? Surprisingly, everyone we talked with says no. Simply because China is so heavily populated. “1.4 billion potential new customers certainly cannot be overlooked.” Nevada’s Lieutenant Governor Lorraine Hunt has made a strong push to get Chinese gamblers to come to Las Vegas. And she’s not concerned if those gamblers try Macau first. “As the global economy expands, so does Nevada’s opportunity for new customers and new business.”

Las Vegas casinos have learned that Macau is actually a very valuable recruiting ground for high rollers, many of who are offered free flights to Las Vegas so they can gamble in the sister properties in Nevada.

Should government build a MICE venue?

Here are my thoughts:

• Governments should let markets be free
• It would be wrong to change the game after these companies invest billions.  This could prevent more investment.

From the article:

After the opening of the Cotai Strip convention and exhibition location, a concern was arose among the industry operators that the monopoly of MICE facilities by gaming corporations would create negative influences on the local MICE development.

 

The operators questioned the intention of the gaming companies, whether it was aimed at assisting the local MICE development, or serving their own gaming industry by making use of the MICE concept.

 

In addition, current data and information such as the exhibition content and nature was not revealed to the public which could result in the same sort of conventions and exhibitions being held several times throughout a year.

 

According to the market regulations, exhibitions in the same type cannot be repeatedly organised within half a year.

 

Therefore, the local MICE industry once again said it was vital for the SAR government to introduce its individual convention and exhibition venue.

Macau casinos are screaming to be seen

Here is one tourists impression of Macau and its Cotai Strip.  Everyone has different opinions on what is classy or trashy, but you cant deny that the Cotai Strip is screaming to be seen.

As visitors arrive from the ferry terminal, what they see is a cityscape of old flats, flashy hotels, gaudy three-star guest-houses and eye-popping structures.

A fellow traveller who was on his first visit said: ‘Everything is screaming to be seen.’

Over at the developing Cotai Strip, slated to be the next big entertainment precinct, the new Venetian Macao is already making its presence felt.

Some of you, if you are like me, may probably need a pair of dark glasses as you enter the reception area. There are gold paintings, a gold ceiling, gold structures and everything else is pretty much in gold.

Full article can be found here.