EXCLUSIVE CEO INTERVIEW
55
Sands Cotai Central represents no threat at all? I don’t see any major threats. I don’t mind growth. When
you see an explosive market growth rate of 40 percent-plus for 2011, why should we be afraid? I have never been concerned about gross gaming revenue
market share. We are more after pro t volume. I keep saying that concentrating only on who has the
higher market share is the wrong approach. I see the market growing so rapidly that we can barely catch up. What we need is good products that continue driving additional business into Macau. Take a look at Galaxy Macau. We actually moved the nee-
dle. Since we opened, nobody has been doing less than before. We have a good property and of course we are growing faster than the others. I’m sure if somebody comes up with a good product they will grow just as fast or even faster. As long as nobody cannibalises the market, it’s all right. The market is too big.
By 2010-end, Galaxy Entertainment had a 10 percent gross gaming revenue market share. Now you have double that percentage, closing in on market leader SJM Holdings Ltd. Are you aiming to become the number one? Market share has never been on the top of our list. This is
only a way of measuring how good you are doing. Every prop- erty has a different business model. Another way of measuring is to see who has the biggest earnings before interest, taxes, depreciation and amortisation or who has the best offer, how many visitors a day. There are many ways of measuring the success of a com-
pany. Market share is not the only way, although it’s a very measurable and highly sensitive indicator. Ten percent or 20 percent, of course it means a lot to us but at the same time, as long as business is pro table and we are not cannibalising any other people’s market, nor spiking up commissions to get the 20 percent, that’s the most important thing. We have never spiked credit liquidity to get market share.
If you take a look at our margins, actually they have been go- ing up. We don’t need to get into a desperate scheme. What’s the point? Not only that. If you are getting those market share num-
bers by spiking commissions, what do you think competitors might do? They would do exactly the same. The challenge is making sure that everyone tries to provide more diversity and better products. Then, everybody will do well.
MASS MARKET GROWTH Not long ago, you predicted mass-market gaming would grow to represent a bigger share of the pie, while VIP gaming would lose part of its overwhelming influence in Macau’s casino industry. We are still not there, are we? What is missing?
“It’s going to take some time for the mass market to catch up because we all know that the VIP market is such a big, big part of the total market”
Again, we are falling into a trap by actually talking about
percentages. VIP turnover in Macau is very high, a very big base for comparison. No matter what you do in the mass mar- ket or with non-gaming revenue, it is not going to move the needle that much. Another way of looking at it would be just measuring how
fast the mass market is growing year-on-year, how fast the non-gaming and hotel revenue are growing year-on-year. That is probably a good indication to see if we are doing the right thing or not. It’s going to take some time for the mass market to catch
up because we all know that the VIP market is such a big, big part of the total market. You are correct by saying that, in terms of the relative percentage, the mass market and the VIP market co-relationship is being kept at the same levels. But a lot of people are putting more emphasis into non-gaming and the mass market.
Recently, there were media reports about your company being interested in pushing ahead three-star accommodation targeting mainland, middle-class visitors. Can you confirm those plans? Most of the new products coming into the market are
aiming at the high-end of it. I believe that those middle-class mainland Chinese would have more opportunities to travel and visit Macau once they are taken care of and provided with suitable and comfortable accommodations. Three to four-star hotels are something that will de nitely have to be provided. We have a big area of land and sometime in the future we will look into that.
SECOND PHASE You still have two thirds of your land plot in Cotai to develop. What are you planning for there? Galaxy Macau has been in operation for only six months.
Soon, we will probably have a good perspective of what does and doesn’t work for us and how we can do better. We have never stopped working on the master layout plan.
I have never looked at Galaxy Macau as an isolated plan but as part of the bigger picture. Of course I have a pretty good idea of what we have to do in phase two. I come from an engineer- ing background, so all these visions and ideas that I have, I still want them to be recon rmed on a piece of paper rst to be sure that I am doing the right thing. I don’t even know how big the hotel rooms should be
nor how many. Soon we will look at the numbers and check, for instance, whether people could afford a longer stay at each one of the hotels at Galaxy Macau. Or which hotels’ guests gamble more and less. Or whether they are actu- ally non-players. All these questions must have an answer before I can come up with a plan that will suit our batch of customers.
Are you planning to add more VIP rooms to Galaxy Macau? We can have more VIP rooms but that very much depends
on the market. We, of course, have the space. We always have space. If you are asking me if we are going to have more gam-
ing products at Galaxy Macau, the answer is ‘yes’, both in the mass market and in the VIP market, but it very much depends on the customers and on the market.
JANUARY 2012
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