New investments and a shift to the mass market will help Macau's gaming industry emerge from its prolonged slump, said casino tycoon Lui Che Woo recently.
"We can see the bottom now," the Galaxy Entertainment Group founder and chairman told CNBC on Monday. "It will start to recover as other companies in the industry are starting to invest in the facilities and moving their direction to the mass market to attract families to come for travel and leisure."
Macau's gaming industry has been in a tailspin for the last two years as the mainland's slowing economy and its crackdown on conspicuous spending and corruption drastically reduced the numbers of VIP spenders in the autonomous territory, the only place in China where gambling is legal.
Recovery may be in sight. According to statistics from Macau's Gaming Inspection and Coordination Bureau released last week, gross gaming revenue rose 7.4 per cent on-year to 18.4 billion patacas (S$3.2 billion), rising for a second straight month after 26 months of on-year declines.
The turnaround came as the world's biggest gaming companies launched some of their biggest long-term investments in Macau on the Las Vegas-style Cotai strip.
In August, Wynn Resorts opened the lavish Wynn Palace, which cost US$4.1 billion (S$5.63 billion) to build, to complement its Wynn Macau mainstay, while Las Vegas Sands' Parisian Macao hotel and casino opened its doors in mid-September. The twin Macau launches helped to boost the region's gaming revenues.
Galaxy, which occupies the biggest plot on the strip, has also diversified by investing in increasingly family-oriented and mass-market facilities, such as theme parks and an amphitheater to attract big-name performers. The company's gambling license expires in 2022.
"We hope to attract more tourist and leisure customers to increase our mass market revenue," said Lui, noting that his company was aiming for the higher end of the mass market by keeping the "whole family" happy.
"My way of doing it is combining Chinese and Western elements and 'non-gaming,' meaning that we have less gaming-oriented facilities, but more for tourism, family gathering and culture," he said.
Galaxy posted a 26 per cent rise in first-half profit from the same period last year as new resorts helped non-gaming revenue and casino market share.
The company was also expanding in the hospitality business globally, building four hotels in New York, Seattle, Washington D.C. and San Francisco.