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Published on: 10/11/2008
Last Visited: 9/11/2008
GEG Deputy Chairman Francis Lui attributes his company's success to its understanding of Chinese culture and background in real estate development and hotel management.He tells Inside Asian Gaming that rather than following the "supply-creates-demand" philosophy of other bullish developers in Macau, GEG will take its cues from the market in developing the ambitious Cotai Mega Resort
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As Francis Lui explained to Inside Asian Gaming, "it's always the little things, here and there, that make the difference.
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"People probably thought it would be difficult for us to compete with the big boys," says Mr Lui, but the results show "we are running pretty strongly, and with the opening of the Cotai Mega Resort it will be even stronger."
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"Our construction background gives us a leg up in cost control," says Mr Lui.
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"The big decision" for Galaxy when planning its flagship property was whether to "borrow a brand", says Mr Lui, "like getting a hotel brand coming in." In the end, "we were confident enough in our own product that we felt the best way to do it is to build our own brand."And so StarWorld was born.
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Mr Lui observes that Wynn Macau is basically a much smaller version of Wynn Las Vegas, while Venetian Macau is essentially a larger facsimile of its Vegas counterpart.By contrast, "we come into the gaming industry in Macau with no baggage.We don't want to imitate anybody.We don't copy what Vegas operators have been doing.We feel that Macau has an Asian culture, a Chinese culture, so we are going to find our own path."
Still, Mr Lui admits that although "we don't want to copy anything from Vegas, we do learn a lot from them.
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Galaxy tapped into the surging demand with its city clubs, though Mr Lui stresses "the city clubs strategy was not just about grabbing money.
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"We learned a lot from those three years of establishing contacts," continues Mr Lui.Those relationships were cemented by GEG's strict adherence to a consistent business strategy.All other new operators arriving in Macau appear to have backtracked on their initial strategies in some way or other.Although Sands and Wynn now rely heavily on junket operators to drive their VIP businesses, Mr Lui reminds us that in 2004, only Galaxy and Stanley Ho's SJM were actively courting junkets.
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Again, GEG never had any intention to cut out the middle man. According to Mr Lui: "In this part of the world, in Asia, in Macau, relationships count for a lot.I do not want to disrupt an already very established, very successful model.Why should I?
"We have to do a lot of things very quickly, and the market is expanding so fast, so how can we do everything directly ourselves when the market is expanding by leaps and bounds every year?There are so many things that we have to attend to.I'd rather keep a very successful model going, keep working with the junkets and enlarge our share of the overall pie," says Mr Lui.
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Another common assumption Inside Asian Gaming put to Mr Lui is that GEG and SJM are able to work with a larger universe of junket agents than US- or Australianbased operators, because of the stringent requirements imposed on Wynn, LVS and MGM by the Nevada Gaming Control Borad, and on PBL by Australian gaming regulators.Mr Lui says that is a false assumption, and perhaps even a vicious rumour intended to suggest GEG's connections are not entirely legitimate.
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That's not to say Mr Lui believes demand will be a constraining factor in Macau.
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Mr Lui is confident that "in the long term Macau will be the greatest gaming and entertainment destination in the world.
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According to Mr Lui, "the Macau government has already undertaken several significant infrastructure projects," including expanding the capacity of the city's land borders with Mainland China (at both the Gongbei Gate and the Lotus Bridge adjacent to the Cotai Mega Resort) and developing a second ferry terminal.These projects will be completed in time for the opening of the first phase of Cotai Mega Resort.
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Mr Lui emphasizes that GEG will be able to move quickly to have capacity in place to meet demand, when the infrastructure is ready to deliver that demand to Macau.
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"Permira has significant expertise in the international gaming sector through its investments in Gala Coral, Europe's largest gaming company, and in Sisal, the second largest lotto operator in Italy," explains Mr Lui.
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Mr Lui believes GEG can work well with Gala Coral in particular, as sports betting is one of the products Galaxy hopes to bring to Macau, with a virtual sports book to be introduced at Level III of StarWorld before Chinese New Year.
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Mr Lui also hopes to leverage these brands in GEG's Macau developments.
And of course, "the other thing I think they can bring to us is their financing resourcefulness," adds Mr Lui.
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