Skift Take

Macau is an example of an emerging meetings destination that will see U.S. market growth on the backs of its U.S. hotel partners like Sheraton and St. Regis, but the challenges are significant due to the region's reputation as the "Las Vegas of the East."

Starwood Hotels made a big bet on Macau with the launch of the 4,000-room Sheraton Macau, Cotai Central in 2012, which it’s following up in December with the opening of the 400-room St. Regis Macau, Cotai Central.

The Sheraton Macau, the largest hotel in Starwood’s inventory, will likely be repositioned under the new upscale Sheraton Grand brand by the beginning of the new year. The St. Regis will be the largest in its brand’s portfolio.

The two hotels are part of the enormous Sands Cotai Central resort community owned by Las Vegas Sands Corporation. Along with a 600-room Conrad hotel and 1,400-room Holiday Inn onsite, the entire integrated facility offers almost 6,500 guest rooms at multiple price tiers.

Corinne Janssen, director of association sales for the two Starwood Macau properties, told us the destination is undergoing a similar push as Las Vegas to expand its meetings infrastructure and visitor economy beyond gaming. Part of that is due to rapidly dwindling interest in gambling globally. Casino receipts fell 2.6% in Macau in 2014. For the first six months of 2015, Macau’s casinos pulled in 37% less year-over-year.

There’s also added pressure on Macau to diversify its economy due to the Chinese government’s crackdown on corruption and money laundering that began in early 2014, which is also causing revenue losses. That additional scrutiny is scaring away some of the high rollers flying into Macau, who overall are responsible for about two-thirds of the Chinese protectorate’s casino earnings.

Macau Wants To Grow Meetings

Meetings and conventions only make up about 15% of the customer mix at Sheraton Macau, which has over 150,000 square feet of meetings space. Of that guest ratio, less than 10% of the attendees visiting for association conventions arrive from America, although around 25% of the contracts for those conventions are signed by U.S. organizations.

Here’s a look at Sheraton Macau’s year-over-year growth in the meetings segment:

Year # of Meetings # of Attendees
2012 (Sept-Dec) 48 3007
2013 353 56,735
2014 401 112,948

To grow its meetings base, both Macau’s government and Starwood Hotels are offering heavy economic incentives to association groups, including complimentary room nights and free F&B, meeting space and transportation. Janssen says the level of discounts are unmatched among the rest of Asia because of the political will in Macau to develop its group market.

For example, the government is financially supporting large association events hosting more than 200 people from at least five countries with a $100 F&B discount per delegate and 30% off rooms.

Sheraton Macau is doubling up on that with a “Meet For Free” promotion offering one free night per delegate for groups booking at least two nights with 50 rooms, as well as other enticements.

“Using the Macau funding is a huge deal because it’s a way for associations to pretty much guarantee that they can at least break even, or make money on their event,” explains Janssen. “In Europe especially, their annual events need to turn a profit because it’s part of their funding model, so that program has been very helpful for us to convert business.”

However, for Macau to really capture the attention of the North American association market, the city needs to keep evolving its “Las Vegas of the East” image more toward entertainment, lifestyle, culture and culinary pursuits, just like Las Vegas itself has.

The Sands Cotai Central complex is moving in that direction with a new 1,600-seat theater opening at the end of the year. The inaugural show will be a Cirque du Soleil-style production based on the famous Chinese fable of the Monkey King.

“I understand why people think of us like Las Vegas, but the center of Macau is a UNESCO World Heritage Site with over 450 years of history, so we were the original meeting place between the Europeans and Chinese,” says Janssen. “At the same time, Macau as a travel destination is relatively new, and the Cotai Central strip is practically brand new. So those are some of the fundamental differentiators between Macau and Las Vegas.”

Presently, there’s no mention of casino gaming on Macau Tourism’s official homepage. The portal does provide links to lifestyle categories such as culture, dining, shopping and entertainment, but hampering those efforts, both the website user experience and the Business Tourism content are woefully mired in the 20th century.

Macau Meeting Trends

Short booking windows for large conferences and conventions, created by high supplier supply and low buyer demand, wreak havoc on a property’s ability to forecast projections and develop revenue management strategy. In North America, meeting planners are finally beginning to book further ahead of their meetings coming out of the recession, because of the rise in group business overall and the dearth of new hotel construction.

Macau, meanwhile, is in the throes of dealing with super tight booking windows. Janssen says that’s because of the fluid Asian economies and the glut of new hotel product across much of the region.

“Our bookings are just crazy short and I think it’s because organizers do have a lot of options in Asia now,” she says. “We’re working on a large convention right now being signed out of North America. It’s 1,800 people, it’s in February, and they haven’t decided yet. For a program of that size, that’s very short. We had another program in August for a big IT company, which is corporate, that was booked three months out.”

Another difference in meeting trends, North American planners tend to adopt new meeting technology earlier than in Asia. That’s primarily because the people who plan large conventions in Asia are rarely employed as dedicated meeting professionals. Janssen says that most of the planners she works with in the Far East have other roles as well in their organizations, such as administration, marketing or operations.

While most North American planners work off their tablets running web-based meeting platforms when building their programs, many Asian planners are still running around with those big thick binders jammed full with hundreds of loose papers.

To begin the shift toward digital meeting design, planning and procurement in Asia, Sheraton Macau will be the first, or one of the first, to launch Starwood’s proprietary eVent Portfolio toward the end of the year.

First unveiled in North America in the fall of 2013, the software allows planners, suppliers and vendors to connect in real time within the mobile platform, helping everyone forgo endless emails and post-it notes. Also, if there are any personnel changes on either the buyer or supplier side, it’s easy for everyone to track previous conversations.

With regards to how hotel sales executives are engaging meeting planners today, especially in the upscale hospitality sector, Janssen says there’s a greater expectation for hotels to supply more insider destination information and connections than previously.

“We’re now destination ambassadors and destination facilitators because, for example, we have strong relationships in government so we can make the right introductions to get a government speaker to come in, or a high profile executive,” she says. “Organizations are looking for us now to help build content, or at least come up with ideas. That expectation was never applicable, as a hotel seller, in the past. It used to be, ‘What’s your rates, what’s your space, and how do I get to your destination?’ It goes well beyond that now.”

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Tags: macau, sheraton, st. regis, starwood

Photo credit: St. Regis Macau, Cotai Central (left) opens December 17. Sheraton Macau occupies the two towers on the right. Starwood Hotels

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