Global Impact as COVID-19 Hits the West and Macau Finds a New Coronavirus Case: More Questions Arise
Posted on: March 17, 2020, 01:00h.
Last updated on: March 17, 2020, 08:30h.
As the impact of COVID-19 on the gaming industry (and pretty much everything else) mushrooms, we spoke to Professor Glenn McCartney MBE — associate professor of International Integrated Resort Management at the University of Macau, China — for his take on how Macau specifically will be impacted, and how that might compare to Las Vegas and other gaming hubs. McCartney is a global expert on integrated resorts (IRs), casino tourism and destination marketing and management, with more than two decades in the tourism, hospitality and gaming industry in Macau and other countries in the Asia-Pacific sphere.
Since we spoke to McCartney late last week, a new case of COVID-19 has been uncovered. A 26-year-old female Korean national — a non-resident worker in Macau — had traveled to Porto, Portugal with her boyfriend at the end of January. On March 13, they arrived in Hong Kong after a stopover in Dubai, and from there returned to Macau via the Hong Kong-Zhuhai-Macau Bridge on March 14. Later that day, she developed a cough, followed by a fever, and headed to an acute care hospital in Macau. She was diagnosed with coronavirus and moved to an isolation ward. She is not considered to be critical and her boyfriend appears, so far, to be unaffected, but is being watched.
This latest case reminds us that COVID-19 is not a simple problem to solve.
Casino.org: As COVID-19 continues to spread globally – particularly across the US and Europe – how do you envision this impacting Macau and other Asia-Pacific region casinos, especially in light of Trump’s 30-day flight ban to most non-US destinations, including China?
Professor McCartney: Flights cancelled into China won’t impact Macau, for the simple fact that Macau attracts less than two percent internationally from outside China, Hong Kong, Taiwan, and a few other Asian locations. Of the total 39 million visitors to Macau in 2019, 28 million visitors (that’s 72 percent) were from China and 7.4 million (19 percent) were from Hong Kong.
Half of the visitors here simply walk over the border from Guangdong, the province next to us: it’s the wealthiest province in China. Once the green light is given by the Chinese and Macau authorities that will permit tourist travel from there, this will be a significant aid to Macau’s recovery. And I speculate this will happen even before the area is declared virus-free (there are still several cases of COVID-19 in Guangdong province as well as in Hong Kong, but those from Hong Kong can access Macau via the Hong Kong-Macao-Zhuhai bridge).
But this will be Macau’s discussion with China’s Beijing leaders — one on permitting Guangdong arrivals and the other on issuing visas so tourism can recommence. With increasing high-speed rail links to Guangdong from all over China, Macau’s comeback won’t be based on international visitation.
I’ve said previously that casino recovery will ramp up between Easter and start of summer this year. VIP and premium mass make up the bulk of Macau’s gaming revenues, so this is the sector I look to as part of my recovery analysis.
Casino.org: There is always a dual impact when any kind of so-called pandemic is announced: the real threat to the populace and the perceived one. What kind of information is the Macau gaming industry getting out to potential visitors to assure them that the risk is low if they return to gamble at area casinos?
Prof. McCartney: There are multiple government and casino venue posters throughout Cotai Strip properties alerting to COVID-19 and the importance of washing your hands and wearing masks. Properties have released images of extensive cleaning in progress, too. All casino customers and casino staff are wearing face masks.
The Cotai Strip properties produced their own videos in Chinese, some feature staff singing meaningful songs, reaching out to both the communities in Macau and China at large. The West may not see much of this, as its only on Chinese social media platforms (not Facebook, Instagram, Youtube or Twitter – all blocked in China).
Jackie Chan is the first celebrity singing:
There’s a saying in Chinese and frequently used during this time in relation to the COVID-19: “嚴冬總會過去，期待春暖花開再出行”. Translation: “The severe winter will pass. Expect spring flowers to appear again.”
It’s not an issue of the properties being safe. It’s essentially the issue of Macau granting access and China issuing those visas to permit travel here.
Casino.org: You being British — with two decades in China — you understand both the Eastern and Western mentalities when it comes to health concerns. Do you think there’s anything that Asia-Pacific casino operators may be missing in terms of how they understand Western fears of entering casinos vs. those of potential Chinese mainland gamblers?
Prof. McCartney: Macau’s integrated resorts are truly luxurious, with vast open spaces. There is a constant capital reinvestment (CAPEX), so the resorts never look rundown, and they’re some of the largest casinos in the world.
Morpheus — one of the hotels at City of Dreams — cost USD$1.1 billion, while Sands China’s Londoner refit of Sands Cotai Central is ongoing at a reported cost of $2.2 billion. In Singapore, you have the iconic Marina Bay Sands and the Resorts World Sentosa integrated resort.
Las Vegas came to Macau through Sands, Wynn and MGM Resorts. Genting — Asia’s first integrated resort — will now open in Las Vegas. I believe this past decade and the spectacular properties that have emerged in Asia — and continue to do so — have dispelled any issues involving potential Westerner perceptions of entering casinos in Asia.
Casino.org: How much coordination is happening between the Cotai Strip casinos in terms of sanitation protocols and information dissemination?
Prof. McCartney: Before this most recent new case, the previous 10 had already recovered.
The sanitation protocols are mainly a top-down approach, with instructions coming from the Macau government whether to close (and reopen) casinos, bars, cinemas, nightclubs, karaoke clubs, gyms and public parks. All have since reopened with health protocols in place — nearly half of Macau’s casino tables are open now.
Schools and universities have remained closed since the Chinese New Year [January 25], with e-learning in full force — although it’s possible that schools might reopen by the end of April.
This top-down approach to enforcement has always been the case here: Macau’s tourism, gaming, fire, public works, and health authorities have firm control over multiple casino and hospitality protocols, from being permitted to open a casino, number of casino tables, opening a hotel or restaurant, or the more recent casino smoking laws.
Casino.org: A year from now, what do you foresee in terms of Macau’s gaming industry’s recovery from this pandemic, financially and in so far as how it’s prepared to deal with the unexpected?
Prof. McCartney: Gaming revenues will not rise above the 2017-2019 revenues of around $30 billion, in my opinion. And that’s even with a pent-up demand from gamblers unable to visit Macau these past weeks. The Cotai Strip has consolidated at the moment. Players — particularly premium mass and junket VIP — know their casino of choice with repeat visits. Even with new expansions on the Cotai, this won’t move the revenue dial much as 2020-2021 will be in recovery to cover lost ground.
Casino.org: Let’s say a few months from now, all flights are back on to China. As a Westerner, what can I expect to find in a Macau casino that will make me glad I travelled so far to gamble?
Prof. McCartney: Macau’s integrated resorts represent some of the world’s leading hotel brands, restaurants, and pool areas — so it should be easy enough for a Westerner to feel at home.
All casino signage is bilingual, so there is really is no functional reason for a Westerner not to have a great gambling experience. As the resorts are geared towards casino dominance, the rewards programs are generous. There will be fewer Western-style events — things like bands and bars — and less active nightlife than one finds in Las Vegas. But there is certainly ample fine food, beverage and leisure activities.
Casino.org: Now let’s look at it the other way. How do you think players in China — especially high-rollers — will feel about coming to Las Vegas once regular flights resume? What will be their primary concerns and what can US casinos do to alleviate those? Of course, right now, we have some Strip casinos shut down completely, and others partially, so this would be after these properties return to normal gaming and resort operations.
Prof. McCartney: There are a few factors at play here. One is that COVID-19 has been attached to Wuhan specifically and to China generally, attached to negative sentiment which has played out in the media.
This factor, along with the way that Chinese gamblers perceive how Las Vegas is dealing or has dealt with COVID-19, will be important, as safety always rates highly on Chinese overseas travel. Players will compare measures taken in Las Vegas to those expedited in China.
So, a focus from Vegas — and more generally all US casinos — should be on strengthening this relationship given what’s happened. Chinese gamblers will also look at the politics between the US and Chinese governments which may have an impact as well.
Casino.org: Globally, gaming operators always have many unknowns to deal with and have to be prepared for everything from terrorism to health concerns. Do you think Macau’s casinos are sufficiently prepped for all these possible situations?
Prof. McCartney: A few points here. One — that be it casinos, hotels, shopping malls, or event venues — these can be easier targets for terrorism as well as health pandemics, because generally, the global hospitality industry doesn’t want to alienate customers with too many obvious measures.
Macau casinos have state-of-the-art eye-in-the-sky surveillance and security teams, many of whom are in uniform, giving casino patrons and hotel guests a sense of security.
Secondly, Macau had no Plan B given the reliance on the Chinese market and what happened with COVID-19. So, there couldn’t have been a backup plan on what to do if total visitation from China stops.
Macau has no other major markets to turn to — and this won’t change in the foreseeable future. The gaming enclave has become increasingly reliant on China, and, in fact, future growth — in my opinion — will continue in China with the expansion of second and third-tier cities there.
Casino.org: Have you yourself been to Las Vegas? If so, how do you think Macau compares to Vegas in terms of not just gaming, but night life and overall attractiveness to tourists?
Prof. McCartney: Yes. I’ve been to Vegas. A few things were immediate to me. These were designed for Western audiences, based on the [relatively high] number of slot machines and very few tables [compared to Chinese casino standards].
In Vegas, you also see waitresses carrying bottles of beer around the casino floor — that’s compared to Macau where you’d have to ask for one, and ony Chinese tea caddies are openly available. Also, wedding chapels are so popular in Vegas, whereas Macua doesn’t even have such chapels in their IRs. Finally, Vegas looks a lot to non-gaming means to generate revenues — even charging amenities to guestrooms. This is not the case for Macau, which has over 90 percent of its revenues from gaming.
Sure, in Vegas there are Chinese restaurants, chefs, staff, hosting teams, events and promotions which emerged over the years seeing the premium mass and VIP visitation and revenue impact of the Chinese players. It’s all about catering for your market.
Macau’s Cotai Strip has designed itself to cater for to Chinese audiences, be it events, entertainment, dining options, or hotel amenities. It works. Macau doesn’t have all the conventions, events, and entertainment of Las Vegas. A large part of Macau’s non-gaming is ‘comp’ — due to the revenue created from gaming. This revenue model doesn’t relate to that of Vegas, with a third of revenues created from gaming.
Casino.org: Vegas has built a reputation globally as a great culinary epicenter. Does Macau have a similar reputation in China? What kind of cuisines are most popular with casino visitors there?
Prof. McCartney: Similar to the Michelin guide, the recent Meituan Dianping ‘Black Pearl Restaurant Guide’ is establishing itself as the standard of culinary excellence in Chinese cuisine. It awards 1 to 3 diamond ratings depending, and includes everything from family-style restaurants to unforgettable memorable dining.
Sands Macau hosted the Black Pearl Restaurant Guide awards in 2019. Food is so central to the Chinese way of life and is a key focus on integrated resort design in Macau. It also plays a central part of resort marketing messaging, as well as events and imagery. It’s not by chance you will see multiple restaurants or celebrity chefs from various parts of China — highlighting regional cuisine from the north and south.
There are over 50 ethnic cultures in China, so great variance in food types, cooking styles and presentation are prevalent. I myself love Cantonese-style eateries, which are popular in Hong Kong, Macau and Guangdong, such as ‘yum cha’ (literally meaning to ‘drink tea’).
Other popular cuisines are Sichuan, Chui Chow, and — depending on the season — dishes such as ‘hot pot’ during the winter. There have also been increasing innovations in Chinese fusion cuisine, and its presentation and ingredients, which are becoming part of the Macau resort offering.
Related News Articles
Similar Guides On This Topic
Related News Articles
- September 19, 2020 — 28 Comments—
- September 25, 2020 — 14 Comments—