Venetian sets new year record as LVS plans cross-border trade fairs Wednesday, 13 February 2008 by Nigel Huxtable
The figures were used to highlight a turnaround after the largest casino in the world saw visitor and revenue drop last month. LVS also elaborated on plans to win back VIP business it had been losing to Crown Macau and build relations with the Mainland government to protect its growing interests in the country. During the first weekend of the new year the Venetian Macao saw a total of 238,953 visitors pass through its doors which helped boost figures throughout the resort. Hotel rooms were fully booked and the average daily room for the Saturday was 2,883 patacas, which was significantly higher than the 1,775 pataca average for last year. “So much for the conventional wisdom that Asians will not pay top dollar for rooms under demand conditions,” boasted Bill Weidner, president and chief operating officer. Slot machines were also popular over the two days with gamers putting through 141 million patacas compared with 2.9 billion for the entire last quarter. Dealers were also seeing more bets at the tables with a daily average of 1.26 billion patacas wagered in the VIP rooms over the two days compared with 737 million patacas for the month of January. Mass gaming was also up with visitors betting an average of 145 million patacas on each day over the weekend compared with 70.7 million patacas last month.
January decline LVS executives are hoping the renewed activity will turn around a slow-down which culminated in the Venetian's slowest month on record. “The traffic counts in January have probably been the slowest we've seen,” said Stephen Weaver Asian region president. Revenue from rolling chip or VIP play has dropped off for the last four months, from 36.7 billion patacas in October to 22.8 billion patacas in January. Mass gaming revenue also fell from 2.33 billion patacas in December to 2.19 billion patacas in January. A seasonal lull and heightened competition in the VIP market were blamed for the weaker revenues during the period. “The primary difference in January we believe is just a seasonal effect between Christmas and Chinese New Year,” said Mr Weaver. The December implementation of a deal between Crown Macau and AMA International has also hurt business in Cotai, admitted Mr Weaver.
Crown deal bites As of December, Crown reportedly pay a junket umbrella company, AMA International the highest commission levels in Macau in return for exclusive visits from VIP customers of its nine junket operators. The impact on business has caused LVS to alter its commission structure to a revenue sharing model it calls a 60/40 split, where the junket operators receive 40 percent of the revenue. With LVS expecting an average win rate of three percent, the junket operators take home a 1.2 percent cut in place of a straight 1.1 percent commission they were receiving on chip sales. In return for the higher percentage the operators share some of the risk as they receive a percentage of what the house wins. LVS ADMITTED IT DID NOT TAKE THE INITIAL CROWN DEAL AS SERIOUSLY AS IT SHOULD HAVE, HOWEVER SAID THE LOST VIP CUSTOMERS ARE ALREADY RETURNING WITH THE NEW DEAL. “I THINK WE HAVE THREE OF THE BIGGEST JUNKETS IN THE BUSINESS THAT HAVE OPERATED FROM THE VENETIAN AND WE SAW THEIR SHARE SHRINK RAPIDLY WITH HIGHER COMMISSION RATES ELSEWHERE,” SAID MR WEAVER.