When Zhou Enlai, the first premier of the People’s Republic of China in 1949, was asked about the importance of the French Revolution, he replied: “It’s too early to say”.
The same could be said of the Galaxy Macau revolution on Cotai. But the early signs look positive. This is the moment the other Chinese-run Macau operator took off its mass-market water wings and started swimming with the experienced big Las Vegas fish.
Rather than engaging in crystal ball gazing and plucking revenue performance projections out of the air, we’ve decided to focus on a few operational tweaks we noticed that could have an impact on how mass-market business is conducted across the rest of Macau in future.
Let there be light: Some Western observers have commented that the illumination of the main floor looks too bright. They might like to consider the fact that in many working class and lower middle Chinese homes in Hong Kong and Macau as well as in the PRC, living rooms are powered by bright strip lights, not by tiny lamps dotted around the place as in many Western homes. And for Chinese people—who value baccarat as ‘the fair game’ because of its low house advantage—a well-lit gaming table can only be a good thing. There’s less chance of someone at the table cheating and getting away with it—is the likely outlook of the average mass market player.
As one executive of a rival operator said to us on the opening day: “I really think—probably for the first time in the mass-market in Macau—an operator got the lighting just right.
Shop window: The Galaxy Privilege Club, a player rewards scheme, is prominently featured on the eastern side of the floor. Even more importantly, examples of actual rewards—including luxury goods such as bags—are prominently on display in glass cases next to the membership desk. The offer to players is unambiguous—unlike most of the mass market membership desks and schemes we have seen in other properties in Macau.
‘Manifest what you want to achieve’, as some life coaches say. It’s not rocket science to turn a player scheme from an abstract concept to a real shop window type experience. But as with many good ideas, sometimes it takes one pioneer or one person or organisation with vision to get the thing moving.
Divided but united: The main floor is vast but not nearly as intimidating as The Venetian. Like Wynn Macau it is broken up into zones, but unlike Wynn Macau you still get a sense of the whole and you have a horizon to work with. This allows guests to navigate their way around easily. If you want to find Elektroncek’s new 34-station three-game Organic Island installation (sic bo, roulette and fish ‘shrimp’ crab), for example, that’s no problem. The sightlines are such that you can see the overhead display of the installation from almost any point when you’re in that half of the floor.
One slight reservation about the main floor is that it looks as if it could provide a real challenge for security in terms of coordinated monitoring. We understand that having two very large entrances at the north and southeast ends of the floor—complete with water features in the respective lobbies—is probably perfect from a feng shui perspective, but there are no natural security ‘pinch points’ in the way there is in most casino layouts. As a result, there’s no sense that you have passed a point of no return and from here on in you’re under surveillance. What impact if any that might have on guest behavior isn’t clear at this stage.
No cage fighting: There are plenty of cages located along the sides of the mass floor—unlike some properties we could mention where guests deserve a marathon winner’s medal by the time they a) locate; and b) walk to; the cage. One glitch we did notice, though, is that the queues of people at the cages on Monday (the second day) were snaking back into the slot and table playing zone. That could be a function of several things, including the unusually high traffic levels and the relative lack of live operational experience on the part of at least some of the cage staff. If the issue persists, an easy fix should be to move some of the banks of slots further in from the side of the room, though the same issue might be slightly harder to fix in the table zones without creating a sense of crowding.
A big VIP offer: Much comment and analysis has naturally focused on what Galaxy Macau will do for the mass market. But in a place where around 72% of gross revenues come from high roller baccarat, no new property can afford to overlook (or underlook) the VIP segment. Galaxy Macau has a lot of product and variety, with eight main VIP rooms around the property as well as high limit tables and slots as the bandstand-like centerpiece of the main floor (a characteristic shared with the unsung SJM-licensed Babylon casino at Fisherman’s Wharf).
The feedback we got from industry sources is that commission rather than revenue share is most commonly the business model being used in the Galaxy Macau VIP rooms (at least in this opening phase). Perhaps the more important general point is that Galaxy doesn’t try and rob Peter to pay Paul in its dealings with junkets. In other words it doesn’t try simply to restructure its offer and claw back its profit in some other way. The company has already built a reputation for building solid and mutually beneficial relationships with the junkets.
As one VIP room executive put it to us: “The Chinese way in business is to share so that you all get rich together. The Western way is to beat the other guy and get rich at his expense.”
We’ll leave it to our readers to interpret that as they wish.
Cotai is not a zero-sum game. The ‘stickiness’ of The Venetian as a first stop on Cotai probably resides in the fact that it’s a photo opportunity entirely independent of its gaming offer. That allows it to capture gamblers and non-gamblers. It has a lot of shops, even if conventional wisdom suggests there are rather too many mid-market, underwhelming brands (to Chinese consumers at least). Some analysts we spoke to—while very impressed by Galaxy Macau’s gaming offer in both key segments— still wonder if the property can carve a role as a tourism stop in its own right. They cite some doubts that the artificial beach—impressive as it is—will achieve that.
After the initial opening rush, Galaxy Macau needs to establish itself as a first gambling stop on Cotai. The shopping offer by itself won’t be a crucial draw. There are also important logistical reasons why it will be a challenge to make Galaxy Macau a ‘second stop’ on Cotai for Venetian customers. Galaxy Macau is just a little too far away from The Venetian to be a comfortable walk in a muggy Macau summer and getting a taxi away from The Venetian often requires a long uncomfortable wait outdoors. City of Dreams has vulnerabilities—the Hard Rock casino is not a well-known brand in China and is often sparsely populated, in our experience—but it is only a short walk from The Venetian, making it a natural number two destination for Sands China’s Cotai customers.
We are aware, however, that Galaxy’s management has been very focused on creating the right infrastructure in terms of marketing, bus services and greeters to develop the pipeline of ‘first stop’ visitors to Galaxy Macau. That’s important, and is likely to be key in ensuring the sustained success of the property. Now all they have to do is educate customers that the inverted hand driers in the Galaxy Macau washrooms aren’t actually waste paper baskets.
