High-rollers not enough for IR’s success (Singapore)
(source: LexisNexis May 7, 2006)
High-rollers not enough for IR’s success: Harrah’s;
Integrated resort needs thousands of visitors a day to become viable
Vikram Khanna
(SINGAPORE) High-rollers alone will not be enough to make Singapore’s integrated resort (IR) viable, says Gary Loveman, chief executive of Harrah’s Entertainment, which is bidding for the resort contract.
The resort’s five million square foot of capacity will instead require ‘thousands upon thousands’ of visitors a day.
Mr Loveman suggested that there is some misunderstanding – and exaggeration – about the role of ‘high-rollers’ in the context of Singapore’s IRs.
‘The way we use that term in Las Vegas, there are about 300 to 400 high rollers in the world. These are people who bet US$50,000 to US$100,000 per hand – or more – playing baccarat. Everybody knows who they are. We know, MGM-Mirage knows, Sands knows, the Australian casinos know, everybody knows.
‘But Singapore’s IR is going to need thousands upon thousands of visitors a day, not just 300, mostly Chinese, high-rollers.
‘In other words, we’re going to have to appeal and cater to very broad categories of people from many places, who will come for different reasons.
‘Some will come during the business week, some will come during weekends, some will come on holidays.
‘We’ll have to pull in visitors on a large scale who have the capacity to visit fairly often and spend a fair amount of money. That’ll be largely upper-middle class folks from around the region – from India, China, Malaysia and Indonesia – and Singapore too.’
Las Vegas-headquartered Harrah’s, together with its partner, Keppel Land, is one of the bidders for the proposed IR at Marina Bay.
The other bidders include Las Vegas Sands, MGM-Mirage – another Las Vegas company, which is partnering with CapitaLand – and Malaysia’s Genting Bhd.
A final decision on the winning bidder is expected by the end of next month.
Harrah’s, which is the largest gaming company in the world, is best known for its sophisticated customer-relationship management (CRM) systems, whereby it mines data on its visitors and targets visitors individually with customised promotional programmes.
The strategy has translated into substantial revenue gains.
Mr Loveman said that Harrah’s would extend its CRM systems to its Singapore operations.
‘We’d have to take it in steps,’ he said. ‘The first two things we would want to make sure is to have great service for everybody, and service that’s customised to what people tell us they care about. I’m very confident we can do that.
‘Moving into some of the more sophisticated analytics will take a little time. That will require assimilation of the fact that customers will be coming from many different countries and cultures and speaking different languages.’
Like the other bidders, Harrah’s-Keppel has proposed various attractions to help draw visitors to its IR. However, Mr Loveman maintained that much of what it is offering is different and innovative. ‘For example, the I-Port concept we plan on providing is pathbreaking; there’s nothing like it in the world. I don’t think what anybody else offers comes even close to it.’
The proposed IPort is a US$500 million theme park featuring motion simulators, virtual reality, computer animation and other high-tech features never seen before, as well as live-action attractions. It is to be conceptualised by Academy Award-winning movie director James Cameron, who has directed blockbuster films such as Titanic and The Terminator series.
Harrah’s-Keppel has also tied up with 13 non-equity partners in areas that include conventions, retail, broadcasting, art and entertainment – including Chinese and Indian entertainment.
Among all the US-based bidders, Harrah’s is the only one to have an investment-grade credit rating.
‘It’s indicative of the conservative nature of the company,’ Mr Loveman said. ‘We’re not over-leveraged. We’ve run the business according to a very conservative set of principles for a long time.’
He pointed out that Harrah’s is also the only company to centre its Asian operations on Singapore alone. ‘We are really focused on Singapore, not Macau or anywhere else. This is where we want to be.’
‘If I was a government decision maker,’ he said, ‘one of the issues on my mind would be: ‘Will this get built as proposed? Avian flu, Sars, terrorism – a lot of things can happen between now and 2009. Who can I count on to ensure this is going to get done as proposed?’ Together with Keppel, we will absolutely deliver. Our commitment to it is total and we have the financial wherewithal to do it.’
May 7, 2006
Date Posted: 11-May-2006
