Could Macau's Big Gamble Go Bust?
Photo courtesy of Thinkstock
It is no secret that Macau has been struggling. Just a few short years ago, the territory was tagged as the next Las Vegas. It even eclipsed the Nevada casino haven in terms of overall gambling revenue. The world’s major gaming industry players (including the likes of Wynn and Sands) have invested in the territory.
Revenue has fallen drastically this year for several reasons. While there are plans to alter Macau’s image so that it is attractive to travelers who are not interested in gambling, it now looks like that move could possibly be too little, too late.
Mainlanders are staying home
Actually, the change in focus to the kind of “mass market” tourism that Macau’s developers hope will lead to a turn-around is a bit of a gamble itself. The strategy worked in Las Vegas, but Macau might have a different set of variables in play.
Macau’s success was built on the backs of Chinese high rollers. These gamblers have been staying home on the Mainland for fear that Beijing will not look kindly on their baccarat habits amidst a major corruption crackdown. Furthermore, the Chinese economy has been struggling, meaning that fewer gamblers in general have money to risk at the tables in Macau.
Is it too late to turn into a mass market destination?
The slump continues, and the numbers have now reached worrying proportions. Macau’s revenue is down a hefty 32.3 percent for November compared to the same time in 2014. This comparison doesn’t even paint a complete picture of how bad it has gotten, because profits were already falling at the end of 2014.
Early mass market developments, like Studio City which opened recently to much fanfare, have yet to gain traction. Other developers have plans in the pipeline, but most will likely wait to see how Studio City performs before they break ground.
Competition around the region
Other countries are realizing the potential of gambling. Cambodia, for example, has opened casinos and marketed directly to Chinese players. The country’s government has even pushed to set up air connections between Macau and Cambodia so that whales can get to Khmer casinos easily. The attraction for these gamblers is that, in Cambodia, they can play further away from Beijing. Singapore has likewise opened up what it calls Integrated Resorts, which are casino resorts similar to the kind that now line the Las Vegas Strip.
Macau is hoping to offer the kind of mass market appeal that Singapore’s IRs have. However, the nearness to the Mainland could actually be a drawback for Chinese vacationers who want to hit the tables. Judging by current travel trends, these people want to put as much distance between themselves and Beijing as possible before laying their bets.
Difficult to overcome its image
The big problem is that Macau is already established as a gambling destination. The other places in the region scrambling to capture Mainland China's outbound market can tailor their message to fit the current desires of Chinese travelers, whether that be warmer weather, more diverse attractions or more anonymity.
Macau will always have casinos. However, the promise that it showed just a couple of years ago may never be realized. This will especially be true if the mass market developments like Studio City fail to live up to expectations.
More by Josh Lew
Get Travel Deals and Travel News
Recent Travel Opinions