FOXTROTS

Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.

Foxtrots – leading the industry in a dance.

 

February 24 2014

Casinos into travel

(An excerpt from our monthly Travel Business Analyst newsletter.)

The development of Macau into a giant gambling-leisure destination has brought gambling into the travel business in Asia.

 

Worldwide gambling revenue is put at US$160bn a year. In 2010 the US was about 50% and AsPac about 30%. PWC, a consultancy, reckons that AsPac will be the biggest by 2015; we estimate that this happened in 2013.

 

There are three surprises about the business:

 

1. Macau annual gambling revenues are much higher than its competitors – US$38bn (quoted in US$) compared with US$6bn in Las Vegas, the destination usually considered the biggest of them all, see table.

 

(Note, however, that although Macau and Las Vegas publish their gambling data, most of the rest do not, or mix it with other revenue. Morgan Stanley does not give its sources.)

 

 

2. That Macau is 6-times bigger than Vegas is not the only surprise. Perhaps a bigger surprise is that Singapore’s revenue is almost the same size as Vegas’s. Yet Singapore has only two casinos (Vegas has 74!), which have been open only three years (Vegas 80 years, Macau 50 years) and is not on the border with the biggest gambling market, China.

 

However there are twists to the story. Macau has become almost a gambling-only destination for visitors from China. The other attractions in Macau – from events, entertainment shows, even prostitution – are a side show to the principal attraction of gambling.

 

For Singapore, gambling has become another visitor attraction, albeit one with a strong pull. Although China is also a big source of gamblers, the casinos attract not only ethnic Chinese from markets other than China, but many others.

 

 

3. The third surprise is the low ranking of Malaysia, despite the fact that it has been running casinos for 40 years – longer than most all other AsPac centres except Macau.

 

 

Gambling revenue in Asia, 2012

Destination No,US$bn Per visitor, US$
Australia 4.2 736
Cambodia 0.2 73
Korea 2.0 189
Macau 38.0 1354
Malaysia 1.9 72
Philippines 1.8 404
Singapore 5.9 446
Others
Atlantic City 3.1 112
Las Vegas 6.1 156

Notes: TBA estimates from MS data. Source: Morgan Stanley, The Economist, Travel Business Analyst.

 

 

The Fox

Remember, I’ll be famous after I’m dead.