Chinese Premier Li Keqiang praised Macau’s efforts to diversify its economy during a three-day visit last year, but market experts say operators are still trying to get the recipe right when it comes to non-gaming attractions and face an uphill struggle. Revenue from non-gaming has improved, however, Macau is still far from being a destination that will attract visitors for its tourism offering off the casino floor.
With signs Macau is well on the road to recovery; the Philippine market growing in double digits; and the prospect of casinos in Japan, 2017 is starting on a more promising note for Asia’s casino industry. We asked some of our contributors to give us their predictions for what will be the most notable events and trends of the year ahead.
To coin a popular phrase, 2016 really has been a year of two halves in the Asian gaming industry. To continue with the cliches, it’s also fair to say there have been a few curved balls along the route. Industry experts gave us their views of the year just passed, with the good, the bad and the ugly.
The dramatic slump in Asia’s VIP revenue over the past two years has forced operators to trim costs and diversify income sources to plug the gap. While much of the focus has been on boosting non-gaming and tapping into the mass market, companies have also been looking at ways of unlocking shareholder value through monetizing extensive fixed assets. From real estate spinoffs, to timeshares and outright sales, many options are being considered.
Vietnam’s slow-moving legislative process, combined with the burden of the existing regulations, means the country’s full potential as a gaming destination won’t be reached until the next decade at the earliest, industry experts say. Although there has been a lot of speculation that there will be some relaxation of these rules, it now doesn’t look likely to happen for some time to come.
Asia’s casino markets are being held back by a lack of regulation, rather than lack of demand, with the underlying drivers for growth, such as under penetration, a rapidly growing middle class and strong propensity to gamble still intact. That was the message from speakers at the G2E Asia conference in Macau this week, with analysts bullish on the prospects for the region despite the current market downturn.