- Investor Mark Mobius shares insight into changing economies
- Vegas and Macau’s differences highlight market and consumer trends
The business mogul compared and contrasted the two regions, looking for reasons to explain Macau’s blossoming revenues despite Las Vegas’ far larger visitor numbers. He concludes that both cities have embraced a changing approach to industry, where service and value matter most to consumer spending.
Macau revenues booming despite lower footfall
Mobius notes that Las Vegas is still the champion of casinos, entertainment and pleasure. The city has far more high-end shows and celebrity guests, and offers more glitz and glamour for visitors. There are close to 100,000 more casino resort rooms in Vegas than in Macau, and the city gets around 43 million visitors annually – Macau recorded 31 million people in 2016.
However, gaming revenues in Macau topped $32 billion this year – largely due to a rise in VIP and High Roller casino players. VIP play accounts for roughly 57% of all Macau gaming. In Las Vegas, the mass market dominates. $25 billion was made in the previous year across all Las Vegas casinos – despite the city having far more gambling venues than Macau. So what is Macau’s secret?
Service and experience win over consumers
Macau gambling revenues make up 80% of all land-based casino income, notes Mobius. In Vegas, the figure is less than 50%. While Macau has a gambling focus across all venues, in Vegas the revenues are diversified across different industries. Hotel rooms and services, food and drink, shows and souvenirs are all crucial to the Las Vegas economy, and modern consumers have shown a strong demand for experience and value when they spend.
Both cities are busy and filled with visitors, creating valuable investment opportunities for savvy business owners. Automation is also changing these gambling cities, with electronic games replacing casino floor staff who can then move into service roles. Mobius leaves his readers with one final thought, which applies equally to gamblers and investors: “Don’t gamble more than you can afford to lose!”
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