Inside Asian Gaming

IAG JAPAN MAY 2019 10 www.asgam.com EDITORIAL Ben Blaschke Managing Editor We crave your feedback. Please email your comments to bb@asgam.com. Raising the bar I f ever we want to gain an insight into the changing nature of the modern-day tourist, we need look no further than Asia’s gaming and leisure industries. Epitomised by the growing influence of China’s upper and middle classes but with a similar story right across the region, today’s travellers demand more than ever before when it comes to everything from the ease and comfort of getting there to the quality of their hotel rooms, diversity of dining options and overall guest experience. ChinaPower, a US website that examines China’s socio-economic rise, states that, between 2002 and 2012, the country’s middle class exploded from just 4% of the population to 31%, comprising around 420 million people. Similarly, between 2001 and 2015, wages in China averaged an 11% increase each year. Most importantly for gaming and leisure destinations like Macau, Singapore, Las Vegas and even Australia, the result has been a greater propensity to spend on travel. According to ChinaPower, annual spending by Chinese outside of China grew from US$10 billion in 2007 to US$260 billion in 2016, a 2,500% increase and more than the US$160 billion spent by US citizens traveling abroad that year. Notably, Macau ranked second behind only Hong Kong as the destination of choice for mainland Chinese. It should come as no surprise then to see the region’s leading gaming firms shifting their focus towards the lucrative premium mass segment – actively targeting this growing demographic of high-end spenders with more than just gambling on their minds. Among the most active of late has been none other than Las Vegas Sands (LVS), with the forefathers of Macau’s Cotai Strip in the midst of a multi-billion dollar make-over of Sands Cotai Central as well as upgrades to the Venetian and Parisian. “The landscape in Macau has changed dramatically since 2014,” said LVS President and COO Rob Goldstein during the company’s recent 1Q19 earnings call. “This is a market driven by mass and premium mass. “We have the scale and the quality of rooms and suites and retail and gaming and entertainment to excel in this environment. “But it’s just not scale for us though. I think what you have to roll out is quality. That’s why we're building 1,300 new suites as we speak at The Londoner and Four Seasons. It’s a lifestyle commitment by these customers.” It’s a similar strategy being deployed by LVS in Singapore, with Goldstein revealing that the company’s US$3.3 billion expansion of Marina Bay Sands is “taking dead aim at that segment.” LVS isn’t alone either. In Macau, Galaxy Entertainment Group recently announced a HK$1.5 billion upgrade to Galaxy Macau and StarWorld, while Melco Resorts Chairman and CEO Lawrence Ho has made no secret of his company’s intention to also pursue premium mass customers, including in Japan. But when you consider recent estimates suggesting China’s middle class will number 550 million by 2020, it’s little wonder Asia’s IR operators are so intent on raising the bar.