Betting on a growing middle class

Integrated resorts in Asia seek out the region’s middle classes to offset the effect of China’s anti-graft policy that has hit their gaming tables  

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Universal Studios Japan’s new Wizarding World of Harry Potter is an attraction for Asian families

With most IRs in Asia-Pacific geared towards foreign tourists, especially China’s booming middle class, it is not surprising that the anti-graft crackdown by the Chinese government has had a cooling effect on casinos across the region, with Macau the most affected.

Casino revenue in the former Portuguese colony declined for 10 consecutive months to MOP21.5 billion (US$2.7 billion) in March, down from MOP35.4 billion a year earlier, according to data released by Macau’s Gaming Inspection and Coordination Bureau.

“There is still a huge market outside of China that we have yet to tap into,” said Irene Wong, executive director of sales & guest services and hotel operations, MGM Macau. She added that the company has embarked on a strategy to broaden its customer base by offering diversified non-gaming experiences to “accommodate the transformation that Macau is going through”.

Industry players also urge Macau’s IRs to adopt a different game plan to stay competitive. EGL Tours Macau’s general manager, Sabina Iong, said: “As Chinese traffic has dropped recently, (Macau) hotels have now switched to wooing markets like Taiwan and South Korea with attractive hotel rates. IRs should boost (marketing) efforts in South-east Asia as (Macau’s) rate are reasonable and no longer jacked up by the Chinese.”

The Chinese visitor slump has also hit the Philippines, although the business models of Philippine IRs have made them less reliant on the China market than their peers.

“We have to admit we’re all looking forward to getting a good slice of the outbound market from China…we haven’t seen as many Chinese casino players as we would like,” said Francis Hernando, vice president for gaming licensing and development at Philippine Amusement and Gaming Corporation. “But we are not looking at players only; about 90 per cent of (IR) space is not devoted to gaming.”

Mint Leong, managing director at Sunflower Holidays, a Malaysian inbound firm specialising in the China market, said that only a small percentage of her Chinese clients visit Resort World Genting, the only IR in Malaysia with casinos, attracted by curiosity rather than the desire to gamble.

She said: “Most first-time visitors want to see what Genting is about. For repeat visitors to Malaysia, Genting is no longer a must-visit destination, thus the Chinese government’s anti-gambling declaration will have no impact on demand for the resort.”

Meanwhile, India outbound players are witnessing a good demand for IRs in destinations like Macau, Singapore, Malaysia, Thailand and the Maldives.

“Indians looking to indulge in casinos used to head to Goa and Nepal. IRs in Macau like The Venetian Macao opened up the concept of multi-dimensional resorts in India. However, IRs in other destinations like Marina Bay Sands in Singapore are also finding many takers in the Indian market. Segments including leisure, MICE and honeymooners are fuelling the demand for IRs,” said Ashutosh Rawal, general manager, Fun Holidays.

“A lot of these IRs are now investing in the Indian market through activities like roadshows, which have enhanced the trade’s knowledge of these products and the promotion of IRs among their clients,” said Rajji Rai, chairman, Uniglobe Swiftravel.

Several consultants share that the myriad options offered under one roof has been a critical reason why Indian tourists are attracted to IRs.

“Resorts World Sentosa in Singapore, Genting Highlands in Malaysia and Laguna Phuket in Thailand have emerged  as major attractions for Indian travellers. Bintan Resorts in Indonesia is also growing in demand – we are seeing a year-on-year growth of six-10 per cent, said Rajesh Bhalla, manager sales-India, GTMC.

While IRs’ multiple activities are a pull factor for the Indian market, theme parks are a stronger draw for Indonesian outbound travellers, especially among families with children during school holidays and the Lebaran period.

Agustinus Pake Seko, director of Bayu Buana Travel Services, said: “Parents nowadays listen to their children when it comes to picking a destination for their holidays, therefore theme parks play an important role in this.”

Ivone Valentine, tour counter supervisor of Dwidaya Tour, said: “We take into consideration theme parks when creating holiday season packages for families.”

Having established names like Resorts World, Disneyland and Universal Studios in a destination or the addition of well-known characters into theme parks also play a significant role in promoting an IR.

Agustinus said: “The opening of the Wizarding World of Harry Potter in Universal Studio Japan, for example, has managed to attract both new and repeat family travellers to the country.”

This article was first published in TTG Asia, April 10, 2015 issue, on page 15. To read more, please view our digital edition or click here to subscribe

Additional reporting by Mimi Hudoyo, S Puvaneswary and Marianne Carandang

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