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Thursday, May 28, 2015, 09:51

Macao enters era of diversification

By SELENA LI in Macao
Macao enters era of diversification
Galaxy Entertainment Group Ltd opened the second phase of Galaxy Macau and an adjacent property, Broadway Macau, on Wednesday as the casino operator tries to broaden its appeal beyond hardcore gamblers to families and tourists, especially those from the Chinese mainland. (P rovided to C hina D aily)

Macao’s tourism industry is embracing a new chapter of its diversification from gambling, with the first major expansion of a property since 2012.

Galaxy Entertainment Group Ltd (GEG) — one of Macao’s six casino operators — opened the second phase of Galaxy Macau and an adjacent property, Broadway Macau, on Wednesday, with total investment in the expansion and the building of the new facilities reaching HK$25 billion.

“We have entered a new era when the growth pattern in the past decade won’t work today. It means the absolute advantage of the number of gaming tables doesn’t necessarily guarantee better business performance. That’s why we have put a lot of non-gaming elements into the resort and doing it phase by phase,” said Francis Lui Yiu-tung, deputy chairman of GEG.

Macao’s gaming regulator said last week the operator was granted 150 new gaming tables. Against the backdrop of falling revenues from gaming, GEG is the first major operator to expand its facilities.

Macao’s gaming revenues have reportedly plunged for 11 consecutive months to $18.6 billion — down 38.8 percent from a year ago as mainland high rollers stayed away.

The newly renovated casino-and-hotel property Broadway is designed specifically to attract mass-market customers, especially families. Special amenities, such as a 3,000-seat Broadway Theater, will debut with a concert by pop singer Allan Tam Wing-lun this Saturday. “We’re focusing on Asian entertainment because that’s what the market wants,” said GEG Vice-President Jane Tsai Wong.

She told China Daily that by introducing more than 40 local and Asian food and beverage outlets, Broadway Macau will create “a night market feeling and local businesses will benefit from the traffic there”.

The property also provides a vast shopping facility, which connects the two phases of development, featuring more than 200 luxury and lifestyle retail brands, including 30 that are new to Macao.

Lui said it’s too early to estimate the profitability of the non-gaming business. But he predicted that, in the two to three years’ time, the share of total revenue from non-gaming operations could be as high as 50 percent.

In Las Vegas, the contribution of non-gaming averages about 60 percent.

“The new resort offering underlines the group’s commitment to help Macao fulfill its potential as a diversified economy and to develop and nurture local talent and local culture,” said 87-year-old GEG Chairman Lui Che-woo.

Two and a half miles away, Studio City Macau, operated by Melco Crown Entertainment Ltd, is expected to ramp up to full capacity by the end of the year. A tract of reclaimed land with a total area of about 5.2 square kilometers has formed the basis for a wave of future development.

By the end of 2017, all six of Macao’s gaming concessionaires will have completed multi-billion-dollar projects on the Cotai Strip.

GEG’s share price slid 1 percent to HK$38.4 at the close of trading in Hong Kong on Wednesday.

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