Inside Asian Gaming sat down with Dr Hoffman Ma, Deputy Chairman and Executive Director of Success Universe Group Limited, to learn about the company’s plans for its Macau integrated resort, Ponte 16.
Andrew W Scott: Dr Hoffman Ma, thank you so much for talking to the readers and viewers of IAG and for hosting us here at Ponte 16. To start with, could you tell us a little bit about Success Universe and the history of the company, for those who might not be so familiar with you?
Dr Ma: Well, our group used to be a junket operator in the 90s, and we were invited by [Macau concessionaire] SJM to partner with them on this very project, Ponte 16. So, when the new concessions started, we joined with them to build this property together, and we’re the management company of this property. Other than Ponte 16, we also have a travel agency in North America within the listed company as well as a property development investment arm in there.
AWS: Success Universe is a 49% partner in Ponte 16 with SJM holding 51%. How does that relationship work on a day-to-day basis?
Dr Ma: Obviously SJM has the gaming concession, and within the project they oversee the financial governance. In terms of finance, we report directly to SJM, but we are the operator and look after all marketing of the project.
AWS: As the operator, I’m sure you’ve seen a lot of changes since 8 January when the market finally opened up again. What have you noticed about this “new market” we’ve got in terms of demographics and customer preferences?
Dr Ma: The whole industry is market-oriented, particularly all these online social media channels that have been built up throughout the years, like the Xiaohongshu (ie. the Little Red Book). That has helped with boosting the travel industry of Macau a lot, so the industry has ramped up – a lot quicker I think than the industry or even the government ever anticipated.
That’s good news and has contributed to the growth of the mass market segment for Macau. It’s also the direction the Macau government is pointing to, so I think it has helped the industry to migrate from a 50-50 mix between VIP and mass into 85% mass market now. Even the GGR for the mass market segment has been climbing back almost to pre-COVID levels.
AWS: When I first came to Macau, VIP accounted for 75% or 80% of all revenues but as you say it has now flipped the other way. With the demise of the junket industry – and given that Success Universe was originally a junket – how has that changed the business for you?
Dr Ma: We manage the property in a very scientific way. Basically, everything is through data analysis for our colleagues, their shifts, how many tables to open, how to size the minimum bets and what table should be placed next to what other table. We even use data to help inform us about the promotion of tourism. I think we are fortunate that we have always built this property to promote the area as a whole. Our initial goal when we built this property was to benefit local businesses, the small shops, the local tradition and culture, and I think we have got that right over the years. And as you know, the government is putting even more focus now into promoting Macau and the historical culture behind it.
AWS: Ponte 16 is quite a unique property in Macau. You are one of the 11 satellite casinos to survive the re-tendering process for gaming concessions but you are also in a really unusual location here on the Inner Harbor. You’ve got this area all to yourself. Could you tell us a bit about the points of difference of this property compared to other properties in Macau?
Dr Ma: I think we are fortunate to be located on the waterfront and also on the main street where all the businesses used to be. And Ponte 16 is named after the most important harbor terminal of the past, so there is a lot of history to begin with. The area was underdeveloped when we first came in but with everyone working together – ourselves, the government and the neighboring businesses – we have kind of rebuilt this area. It is becoming more popular among tourists. For example, we have many revisit customers and many of them come back because they like this area and because of the convenience our hotel offers.
It really is segment tourism with two types of customers coming to the counter. One is mainly to gamble, so they don’t care about staying in a box – they just want everything to be convenient and to cater to their needs. The other type is those who want to go out. It can be very difficult to get taxis in Macau, so location becomes even more important, and having that convenience to walk around here has been beneficial to us. All these [factors] add up together to create our property, and I think it’s a unique client base we have captured.
AWS: You mentioned some of the advantages of this area, being a historical and an interesting area. What about the challenges, either from being in this area or just generally challenges that arise from operating in Macau at the moment?
Dr Ma: Well, it has been a challenge because the third phase hasn’t been built, although it has almost been resolved with the government. What we had initially planned for has changed entirely. We have grown up with Macau through different phases, and what Macau really needs now is to promote tourism, offer what the tourist wants.
This has been challenging because as you mentioned before, there was previously a 50-50 split between VIP and mass. Fortunately, we stopped basically all VIP businesses in 2019, before COVID, so we have chosen the right direction since then. But it was still a challenge because at that time the market still believed that VIP was a very important segment. That was another challenge we had to deal with.
AWS: You mentioned the third phase and you had announced to the market in 2019 that you were planning to expand this property. What’s the status of that expansion at the moment? Are you planning to revisit that and what are the key considerations given the Macau government’s push for diversification and non-gaming attractions?
Dr Ma: We have planned for a shopping arcade, which is a bit more like a contained area where the new design would create a waterfront entertainment-oriented complex. The customers could enjoy the waterfront and the outdoors a bit more and we would kind of lift the image of this waterfront environment with the new design.
AWS: During the past year, the Macau government passed a new Macau Gaming Law, and there was a lot of discussion about junkets and the way satellite casinos would operate in Macau. The government also announced that it would no longer allow for revenue sharing between the concessionaire and the management company running their satellites, although it then put a three-year grace period in place. You’re currently operating on the rev-share model with SJM for three years. How do you see that playing out at the end of three years?
Dr Ma: Well, as of now, we can’t tell exactly how it’s going to affect us dollar wise, but I think at the end of the day it’s all about business. It’s all about how this property can generate revenue. So, I think especially through our experience with this location and with this property, our partnership will remain strong as long as there is a license. The rest is about business as to how we structure the rental or even the management fee.
AWS: So, at the end of the three years, do you see a future for Success Universe and for Ponte 16 as a satellite casino? Do you see yourself going beyond those three years?
Dr Ma: Certainly we are confident that it’s going to go beyond that. And certainly we are confident that this location will remain, if not better, at least as popular as a tourist location.
AWS: In signing its new 10-year concession contract in December, SJM said it was planning on a major redevelopment around this area, around Ponte 16. I’m sure your company has been consulted about that. Do you have anything that you can tell us about the redevelopment and what’s planned?
Dr Ma: I think it’s really relying on what has been developed, as I mentioned earlier, to begin with. This property was designed to create synergy between ourselves and the local businesses.
Now, it hasn’t been moving as quickly, but with the current term of government we have seen a lot of effort around wanting to bring in more for the local people. And I think when it comes to bringing business opportunities to look after the local people, this location is undoubtedly one of the best locations with all of these old shops, old buildings. Obviously, some of these old buildings will be kept as heritage and some will be redeveloped, so there are a lot of opportunities that can be generated through this theme.
