When it comes to revenue growth, casino operators in Southeast Asia may learn a thing or two from Macau’s Cotai Strip business model, analysts said.
Speaking at the ASEAN Gaming Summit 2018 in Manila, Bloomberg analyst Margaret Huang emphasized the importance of the premium mass sector as a revenue stream for brick-and-mortar facilities operating in Southeast Asia.
Huang describes premium mass as players who are awash with money and yet fall short of the category of VIP players. She said these premium mass players like to be pampered and be treated like VIPs.
“That in itself is an opportunity,” Huang said. “It’s a segment that Macau is going after and these guys can very easily come in here (ASEAN) and roll the way they roll and come in as a VIP player.”
Among Southeast Asian gambling jurisdictions, Huang said the Philippines is in the strongest position to capture the growing share of the premium mass market through the development and construction of new integrated resorts.
Philippine Amusement and Gaming Corporation’s Entertainment City in Manila already has three integrated resorts: Bloomberry Resort’s Solaire Resort and Casino, Melco’s City of Dreams Manila, and the newly opened Okada Manila. A fourth casino, Genting Group’s West Side City Resorts World, is targeting a 2020 launch.
Just recently, Galaxy Entertainment Group secured a provisional license to open an integrated resort on the island of Boracay, known for its powdery white sand beaches and warm turquoise waters.
One of the many advantages of the Philippines is its natural wonders that could provide premium mass players with experiential travel, according to Huang. Unfortunately, the Bloomberg analyst said that the country hasn’t fully harnessed its potential and has been heavily reliant on the local mass market.
“There is still a very big domestic gambling presence here but one needs to differentiate and elevate that to go after the premium player as the domestic market can only take you so far,” she said.
Nevertheless, Huang remains optimistic about the Philippines’ prospects. She noted that the integrated resorts in the Entertainment City have prompted competitors to improve the quality of their resorts.
“In addition to providing a one-stop shop, it also has Macau-based operators who can bring in the junkets relationships and the Chinese gamblers interested in coming to the Philippines,” she said.
Meanwhile, Fitch Ratings analyst Vicky Melbourne has allayed fears of a possible oversupply of integrated resorts in Southeast Asia.
The only challenge that Melbourne sees in the region is competition.
“I don’t think there is cannibalization. As you said, there is a number of new facilities being put up in different jurisdictions because there is a demand for it. Without a doubt, I’m not particularly concerned with the mass market of any cannibalization,” Melbourne told CalvinAyre.com.