Inside Asian Gaming

MArch 2016 inside asian gaming 9 Cover Story first half of 2015. Low costs help fuel gaming cruise marketing efforts that resemble those of US regional casinos, including free berths and other incentives for customers who’ve stayed away. Gaming cruises are a decidedly niche product. “It’s a particular market segment that will get on board, sail out, punt all night and into the early morning hours, and then get off around noon and head straight into the office. It’s not for the faint hearted!” Global Market Advisors Asia Regional Office Head Shaun McCamley says. Moreover, there’s no opportunity to try your luck at a different casino, and other amenities are limited. “Bottom line, the cruise business has never been felt to be a threat to land based casinos, and even with the turmoil today, I don’t see that ever changing,” Mr McCamley, who once worked with gaming cruises, says. For VIPs and other serious players, cruise ships aren’t on the radar. But Asia’s high roller market has rolled into rough seas. Macau’s VIP gaming revenue tumbled from US$29.8 billion in 2013 to $16.2 billion last year, a 46% decline over 24 months. Some changes impacting the mainland premium segment may prove permanent. South Korea and Singapore also experienced significant drops in VIP revenue last year. The combination of falling revenue and government policy directives have led Macau to refocus on becoming a leisure and tourism destination, with resorts offering a wide range of non-gaming activities. The goal is to cater to China’s burgeoning middle class. Most Chinese travelers are not primarily looking for gaming, but many do want a vacation experience that includes casinos among other entertainment and leisure options. That puts Macau casino operators on a collision course with the onboard gambling offered by the international cruise operators that are steaming full speed ahead into Asia. FULL AHEAD Asia has become the world’s fastest growing cruisemarket, with China leading the way. Ocean Liner trade group Cruise Line International our mission to transpose the legendary six- star service standards of Crystal Cruises and to customize them to serve the fast growing Chinese market and all our Asian guests,” Dream Cruises President Thatcher Brown, a 25 year Crystal veteran, said at the brand’s unveiling in November. Investment bank CLSA’s Chinese Tourists 2016 report cites a 70% compound annual growth rate in China’s cruise passengers for 2012-14. In November, Dream Cruises will launch the specially designed Genting Dream for 3,400 passengers. The new ship will offer the highest guest space and crew-to-guest ratios of any ship in the region, according to the company, and Mandarin Chinese as the primary language for frontline staff. Genting Dream will follow the routes of SuperStar Virgo, offering embarkation from Nansha, Hong Kong and Sanya. A sister ship World Dream is due for delivery in November next year. “The launch of Dream Cruises completes the Company’s mission of having a brand for each of the three major cruise market segments – Crystal Cruises for the luxury segment, Dream Cruises for the premium segment and Star Cruises for the contemporary segment,” Mr Lim, the son of Genting Group founder Lim Goh Tong who got his start in the family business with Star, said at the event. As Asia’s cruise market moves full speed ahead, Mr Lim hopes to prove his crew knows these waters best. an accounting change – Norwegian became an asset rather than an associate – that caused revaluing of Genting’s shareholding to the tune of US$1.95 billion. Cruise revenue for the period rose 2.5% to $265 million. Last May, Genting Hong Kong completed a US$421.4 million acquisition of Crystal Cruises and its revenue helped offset lower gaming income. Crystal runs round-the-world Star currently has six vessels in the region, including two it moved to home ports in China during the past year … In January, Star’s largest cruise liner SuperStar Virgo moved up the coast from Hong Kong to Nansha in Guangzhou, where Star will help develop an international cruise terminal as part of China’s plan of becoming a global cruising center. cruises with two liners and has three more ships on order, to be delivered from late 2018 on. Meanwhile, Crystal is expanding into the luxury yacht and river cruise segments outside Asia, and plans to launch Crystal Luxury Air, featuring round the world private jet itineraries spanning two to four weeks. Star has poached executives from Crystal to launch Dream Cruises, a premium product targeting Chinese travelers. “It is