p14-20 Macau 16/1/09 08:28 Page 20
MACAU BUSINESS
No hurry for Harrah’s
Straight-talking Harrah’s Asia President, Michael Chen spells out the
company’s Macau plan
W
hile many have blamed – even if Making it happen
partially – the restrictions on
individual visas for Macau’s gaming For Harrah’s Asia top executive, the slowdown “is
industry slow down and the grim natural,” giving government time to control the VIP
economic outlook, Harrah’s Asia business and let the regulatory infrastructure catch
President Michael Chen has a different take. up.
He goes so far as to argue that the fact that things In his view no one, neither the local nor central
have slowed down is a good thing. It’s all about governments, want to see Macau shrink. Chen
sustainable development he says, and the 50 percent suspects Beijing will “influence and work with the
year-on-year growth Macau had experienced was Macau Government in order to make sure things
anything but. happen’’.
“You simply can’t get the infrastructure to catch up Prompted by Macau Business to disclose what
in time; you can’t grow labour at 50 percent year-on- would be a good return for the US$575 million
year – it’s simply not feasible,” he told Macau Harrah’s paid for the Orient Golf Course, Chen says
Business. the company’s
While gaming revenues have indeed declined in isn’t in it for a
past months, Chen believes that the good part of the quick fix.
gaming – the mass market – is growing at a very “We’ve been
healthy rate. The Harrah’s Asia president adds that around for over
despite visa restrictions, the number of China visitors 70 years and
grew 12-14 percent, which he considers a “terrific unlike some
sustainable organic growth rate”. developers,
which are in it to
Not just VIPs generate the
deal, make the
Chen’s rationale is that Macau “wasn’t build for the money and leave
VIPs” – even if they represent close to 70 percent of somebody else
the overall gross gaming revenues. with the
The Macau concept, he agues, was always focused operation, that’s
on the mass market: “Both will exist but the market not what we’re
that I think a lot of the international licence holders about: we have a
are betting on is the mass market – that was always very long-term
the vision. It wields higher margins and that’s why view in Macau,”
you need 20,000 hotel rooms,” he says. Chen says.
The VIPs market doesn’t need that amount rooms, Harrah’s didn’t buy the land with the expectation
he argues. From Chen’s perspective the visa of building something else on it aside from the
restrictions aren’t impacting what he believes to be Caesars golf project. “We bought it to be a
the core customer base of Macau: “Your typical mass contributor to Macau so that we might have the
market Chinese customer is not coming more than option some day to do something, somewhere, in
once every three months; he’s going to come once, town; it might not be here [Caesars Golf], but
maybe twice, a year; if you move the visa restrictions somewhere else,’’ Chen says.
from two times a month to once every three months He argues that if Harrah’s is established in Macau,
its only going to touch the tail of distribution for the contributing, helping the community and proving to
bulk of the people – it just doest matter,’’Chen says. be a good corporate citizen then, in turn, “the
That, he suspects, is why visitations from the Chinese Government and the Macau Government
mainland continued to grow in the last quarter. The will, some day, find it acceptable for us to be a
13 percent increase in visitation, he says, “is very participant in this market.”
healthy for people who have invested in the mass Meanwhile, Harrah’s will develop a foothold here to
market – which is what Venetian and Cotai was built serve and entertain its costumers, and the golf course
for’’. “is great place to do it,” Chen concludes.
20 FEBRUARY 2009
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