The continuous political climate in China could curb many casino resorts’ marketing efforts and focus on the VIP segment, especially the direct VIP channel. In this context, operators will need to overcome challenges to create some unique and exotic experience to attract a large base of mass guests, engaging the natural assets, cultural elements, and other factors specific to the region they are located in. Of note, many affluent Chinese tourists from the country’s first-tier metropolitans have already visited the “must-see” cities such as New York and Paris, and are now looking for more exotic destinations, such as Iceland and Sweden for example.
ADDITIONALLY, WE THINK THE STRONG TOURISM TREND PRESENTS A GREAT OPPORTUNITY FOR THE NATIVE AMERICAN TRIBAL CASINO RESORTS IN THE US. WITH THE RECORD HIGH TOURIST ARRIVALS, ROAD TRIPS IN THE US, NATIONAL PARKS AND OTHER REMOTE NATURAL ASSETS ARE BECOMING INCREASINGLY ATTRACTIVE TO ASIAN TOURISTS.
We believe these trends and dynamics also bode well for further expansion of Asian gaming operators and gaming companies with a strong Asian background/footprint into regions far from China, such as Eastern and Northern Europe. The European market, for the most part, has a stable political environment and strong regulatory control, which also enables Asian operators to capture a wider range of guests and corresponding spend as Europe remains on top of the “dream destinations” list for many Chinese/Asian middle class patrons. As a matter of fact, many companies have already taken actions. Melco’s move in Cyprus, Galaxy’s investment in Monaco, to name a few. The similar trend can also be seen in the Pacific islands.
Additionally, we think the strong tourism trend presents a great opportunity for the Native American tribal casino resorts in the US. With the record high tourist arrivals, road trips in the US, national parks and other remote natural assets are becoming increasingly attractive to Asian tourists (especially younger generations such as the Millennials), boding well for more Asian tourists hitting Indian reservations and tribal casino properties if the “right” products and services are made available.
Note from Michael Zhu, vice president, operations, planning, analysis of Innovation Group.
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