Macau loses as Asia’s Las Vegas
By Muhammad Cohen

MACAU – Figures due this week are expected to show that Macau is bigger than Las Vegas. The former Portuguese enclave in China raked in US$10.4 billion in gaming winnings in 2007, virtually matching the 2006 take for Clark County, the Nevada jurisdiction that includes Las Vegas and surrounding areas.

If Macau misses in the 2007 data, it’s only a matter of time before it leaves Las Vegas twinkling in its rearview mirror. Macau already far outearns the famous Las Vegas Strip, even though the Strip has a 50% advantage in the number of both visitors and casinos. Minimum bets in the Chinese territory usually set at HK$100 (US$12.85), compared with a less than US$1 in some Vegas locations, allow Macau to take in far more per customer and per table than Las Vegas.

Three of the biggest names in Las Vegas - Wynn Resorts, Las Vegas Sands (owners of the Venetian), and MGM Grand - have built mammoth properties that would fit right in back in Vegas. But size, whether it’s your square footage or bankroll, isn’t everything.

"We were just in Las Vegas and this isn’t Vegas," an American engineer living in Taiwan (name withheld by request) says in the midst of the Venetian’s seemingly endless, teeming casino floor. His Chinese wife enthusiastically concurs. "Is there more to it, outside?" she asks, hopefully.

Similarities are different
Those comments highlight danger signs for Macau as it tries to expand its market beyond day-tripping gamblers from mainland China and Hong Kong. Its vast new properties need regional and long-haul guests looking for a broader vacation experience. Ultimately, it’s not Macau’s similarities with Las Vegas but its differences and its skill in emphasizing and exploiting them that will determine its success in attracting those guests. That’s partly because even Macau’s similarities with Las Vegas mask big differences.

For its earliest days, Las Vegas had top stars on its stages (and at its tables and cocktail lounges). Particularly since the 1980s, Vegas hotels expanded from their original desert themes and from the basics to include world-class shopping, gourmet dining, full-scale theater productions, galleries, museums, clubs and more.

Casino resorts in Vegas now earn half of their revenue from non-gambling activities, said Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at University of Nevada, Reno. "Given that Macau is building on the Las Vegas Strip mega-casino model, I expect it will try to follow the same approach," the economics professor said.

Basically, none of the above evolved in Macau during the 20th century, and there’s skepticism about whether the Las Vegas model would work in Macau. When the Sands Macao opened four years ago, the casino was mobbed and its upscale restaurants empty - they’ve now been removed, in favor of more gaming tables and downmarket eats. Macau’s average stay per visitor and average spending have remained stubbornly steady despite expanded temptations and doubled visitor numbers over the past five years.

"Macau has built properties based on Las Vegas’s 30 years of experience, but the Chinese market doesn’t have any experience with the Vegas product," Andy Nazarechuk, dean of the University of Nevada Las Vegas-Singapore’s William F. Harrah College of Hotel Administration, said. "Once they learn, there will be money to be made."

In Macau, the non-casino attractions have barely begun. The Venetian, Macau’s first Las Vegas-scale integrated resort, includes big name shopping in a 200-plus unit mall, Asia’s largest convention venue, and the Venetian Arena, the 15,000 seat arena that’s already hosted Beyonce, Black Eyed Peas, the Cleveland Cavaliers of US basketball, and Pete Sampras’ victory over Roger Federer in a tennis clash of the ages.

Not ready for prime time?
The Venetian’s international drawing power is broadening Macau’s visitor base, but at this stage that may create more problems than it solves. The curtain has yet to rise on Cirque du Soleil at the Venetian and similar shows at other venues, and a range other entertainment on the drawing boards.

The Venetian is the first property in Cotai, the landfill connecting Macau’s two outer islands that’s planned to be its version of the Las Vegas Strip. Right now, there’s nothing but the Venetian and a lot of construction cranes, steel frames and moved earth. Many guests must get the impression they have been dropped - to pick up the Las Vegas desert metaphor - at the single oasis in a vast wasteland, although they’re just minutes away from a full dose of Macau’s east-meets-west charm.

There’s a different aesthetic at work in Macau than in Las Vegas. Here mainland tourists happily snap photos of the Venetian’s fake European historical buildings rather than photograph the genuine 16th century articles in Macau’s historic center. "We prefer fake things," a Chinese friend said, noting that Asia is the land of the Rolex and Louis Vuitton knockoff. But in Macau they don’t get the joke on the biggest fake of all.

Las Vegas is the land of the Elvis Presley impersonator, deeply rooted in kitsch back to the early desert motif hotels: The Sahara, The Aladdin, The Sands, and celebrating the high priestess of American tropical tackiness, The Flamingo. The next generation progressed from Circus Circus and Caesar’s Palace to kitsch on steroids with scale models of the Sphinx, the Eiffel Tower, New York skyline, and Venice. Even though operators like Steve Wynn have brought modern masters’ art, Michelin star chefs, and designer labels to Vegas, the socio-cultural baseline remains Elvis’s peanut butter, bacon and banana sandwich. There may be serious money and serious events there, but no one takes Vegas seriously.

Macau’s copies of Vegas imitations are not presented as punchlines of an elaborate joke but as genuine luxury articles. Singapore, which is building up its own nest of casinos, recognized the danger. It insisted that the proposals for its two casino resorts be original designs and specifically prohibited imitations of other destinations.

Runway fashion
The Venetian Macao is undeniably a marvel. The world’s second-largest building (behind Boeing’s plant for assembling 747s), built to suck through 100,000-plus visitors daily and leave them fractionally poorer while treating them to gondoliers paddling through indoor canals, handpainted frescoes on the ceilings, and the chance to walk away as millionaires, or at least live for a while as if they were.

But the Venetian shares less with an exclusive resort destination than it does with an airport, right down the Samsonite and See’s Candies outlets. Parts of the Venetian (just like the platinum lounges at airports) are sumptuous but overall it feels overwhelming and isolated. Once inside the Venetian, it seems impossible to get out. It also seems as if there’s nowhere to go, exactly the way management wants it. Yet the Venetian is within walking distance of Taipa Village, one of the most engaging sections of Macau, embodying its 500-year legacy of Chinese and European cultures.

Instead of its fakes, no matter how fabulous, Macau should be promoting its real heritage as a crossroads between east and west in a relaxed setting more like southern Europe than southern China. Putting the spotlight on that heritage would spread spending beyond the casino resort fortresses to keep homegrown businesses happy.

More importantly, it would differentiate Macau among destinations as gaming spreads in the region. Within two years, Singapore will have a casino resort by the creators of the Venetian in a unique high-rise package, and another by Malaysia’s Genting/Star Cruises on a beach resort island featuring a Universal Studios theme park. Malaysia, Cambodia and South Korea already have casino resorts, as does Australia. (Like Vegas, all are particularly friendly to Chinese players.) Vietnam, Thailand and Japan are seriously considering getting into the business.

What will set Macau apart aren’t gambling and Vegas imitations, but its unique Mediter-Asian heritage. Macau’s real success, big enough to justify the billions invested, won’t be Asia’s Las Vegas but as the world’s only Macau.

Former broadcast news producer Muhammad Cohen is special correspondent for Macau Business and author of Hong Kong On Air (Hong Kong On Air), a novel set during the 1997 handover about television news, love, betrayal, high finance and cheap lingerie.