As the Macau gaming industry flounders, operators are trying to determine what to do to bring in gamblers. The Las Vegas Sands Corp. President and Chief Operating Officer, Robert Goldstein, has stated that gaming operators in the city will most likely not begin a price war in regards to casino marketing offers but hotel prices may begin to be more aggressive. Operators have to appeal to mass-market gamblers and Goldstein suggests that discounting the hotel rooms in Macau would be one way to do so. This would be particularly so as the inventory of rooms in Macau continues to increase as properties open in Cotai from now until next year.
According to ggrasia.com, several investment analysts have stated that as Macau’s structure begins to shift within the gaming market towards mass play and away from VIP gaming, the margins of casino operators will become more pressured, with an increase in marketing spending expected to attract what is being called the base mass and premium mass players.
The gross gaming revenue for baccarat VIP gaming in Macau has fallen consistently since 2013, as part of the city’s gaming revenues. On Thursday of last week, Goldstein spoke during an investment conference and responded to a number of questions including pressure that may come towards Macau operators to give away more incentives to gamblers who are considered mass-market.
According to Goldstein, promotions are going to become difficult on the gaming side. Goldstein says that more promotions or discounts on rooms will be seen because the room inventory is continuing to grow significantly. Wynn Palace, the Parisian and MGM Cotai will be providing 5,000 to 6,000 guest rooms to the gaming city. This will mean more competition which means operators will have to come up with ways to offer lower priced options to entice visitors.
Macau has shifted to the mass market with the weekly distribution of gaming revenue moving towards a weekend basis. This is a common trend found in Las Vegas. Goldstein stated that in past in Macau, if hotel rooms were running on empty, the high-end business would pick up the slack. This gross gaming revenue from high-end customers is decreasing which is leading to less overall revenues for the gaming operators.