With Gaming in a Slump, Macau Resorts Branch Out

Martin Scorsese is directing a short film with a dream cast: Leonardo DiCaprio, Robert De Niro and Brad Pitt. It's an upcoming promotion for the $3.2 billion Hollywood-themed Studio City resort in Macau, the world's gambling capital, which will open mid-year with a Batman-themed virtual reality ride and a Ferris wheel embedded in its faux Art Deco façade. Another resort, Galaxy Macau, is finishing up add-ons to what will become a $5.5 billion property. Its execs embarked on a 19-city tour through China to promote its amenities, which include a Broadway-style theater and the world's largest rooftop wave pool. Macau, which has gaming revenues seven times those of the Las Vegas Strip, is in a building boom. As competition grows, properties have become locked in a marketing battle to one-up each other in the former Portuguese colony. Macau is the only place in China where casino gambling is allowed, but the central government has been pushing it to diversify, so resorts are trumpeting more offerings like shows, shopping and food, along with Ferris wheels and wave pools. Their new pitch comes at a crucial moment. Amid China's crackdown on corruption and ostentatious displays of wealth, gaming revenues fell 2.6% to $44 billion in 2014, the first-ever drop on record. February's drop of 49%, during the Chinese New Year period, was dire. China's high-rollers are staying away, and more gamblers are heading to casinos in the Philippines, South Korea and elsewhere. Now that gambling has become risky business, Macau wants to rebrand -- and fast. "The battleground for 2015 and possibly beyond will be middle China," as opposed to the high-rollers of the past, said Kevin Clayton, chief marketing officer of Galaxy Entertainment Group. For Galaxy Macau, that means 120 new food-and-drink outlets, 200 shops and an entertainment district filled with food hawkers and street performers. Galaxy, founded by Lui Che-woo, one of Asia's richest men, also offers less pricey alternatives to the new JW Marriott and Ritz-Carlton set to open in May in its complex. In Macau, Mr. Clayton said, "a lot of ills could have been hidden historically in terms of marketing spend." But now there's more pressure on budgets and more need for sophisticated measures of return on investment, he said. (Nonetheless, there have been a few extravagant campaigns lately -- see the box.) Galaxy Entertainment -- whose revenues rose 9% in 2014, then dipped 32% in the first quarter of this year amid the slump -- said there's a need for constant newness, including selfie ops worthy of social-media sharing, to convince guests to come back. Soon there will be additional competition: the Parisian from Sheldon Adelson's casino operator Las Vegas Sands Corp., and a new offering from Wynn Resorts, founded by billionaire Steve Wynn. If Macau's tale seems somewhat familiar, it's because it has echoes of Las Vegas. Vegas rebranded a few times, unsuccessfully trying to go family-friendly in the 1990s before striking gold in 2003 with the "What happens here, stays here" campaign. That campaign by the Las Vegas Convention and Visitors Authority and R&R Partners tapped the insight that Vegas is a place to let loose. Macau's tourism slogan is "Touching Moments, Experience Macau." Maybe it's time for something catchier and bigger-budget. Jay Milliken, a Hong Kong-based senior partner at branding and marketing consultancy Prophet, noted that in Las Vegas, the Convention and Visitors Authority is funded by hotel-room taxes that pay for creative campaigns and market studies. "So every casino is helping to promote Las Vegas as a destination, and that benefits competitors but also themselves," said Mr. Milliken, who has worked on Prophet projects in Las Vegas. After all, he said, "you decide on going to Macau first, and then you decide where in Macau you want to go."

With Gaming in a Slump, Macau Resorts Branch Out

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