Andrew Tottenham and Alidad Tash engage in a very interesting debate in whether Integrated Resorts will have a major impact on the European market
Firstly, one must understand exactly what an Integrated Resort is. Mr. Tottenham and Mr. Tash both describe it as a resort, not only a casino, but also with features such as conventions, retails, hotels and restaurants among other aspects. These activities are there to drive visitation as Andrew Tottenham says:
“It is not just a resort with a casino, the important thing here is about scale and scope and what I mean about that is you need a sufficient density of activities to really drive visitation"
Therefore, IRs must have a number of activities to attract tourists, making them want to stay at the resort while also be able to entice locals and tourists staying outside of the IR to visit in order to drive up revenue.
Furthermore, Alidad Tash continues to add that IRs remove a very important hurdle when a tourist visits a country. More often than not, people visiting a country are unaware of their surroundings and that “IRs remove the element of transportation.” He uses the phrase “time is money” and by eliminating a lot of travelling time, it allows the IR operator to generate higher revenue as everything will be within their vicinity.
Interestingly enough, Andrew Tottenham recalls the time he heard about IRs for the first time. It was during a lunch were Steve /PHOTOS/2020/Andrew%20Tottenham.jpg?width=300&name=Andrew%20Tottenham.jpg)
Wynn described a bombastic and ambitious project which included a 3,000-room hotel with white tigers, sharks and a volcano. This idea did not go down too well at the lunch but funnily enough, the first ever IR in Las Vegas was a major success proving Steve Wynn’s idea to be a stroke of genius.
Mr. Tottenham (pictured left) added that IRs have been influential to Las Vegas visitation numbers as before the expansion of IRs, Las Vegas recorded 20 million visitors per year and after IRs were built across the Strip, the number of visitors increased to around 40million per year.
He adds that, “Integrated resorts has made Las Vegas resilient. Casino gambling is now legal in 44 states in the US and yet people still go to Las Vegas. People will fly long distances to go to visit Las Vegas”
Alidad Tash agrees with Andrew Tottenham and also adds that Steve Wynn declared that gaming revenue will not dominant non-gaming revenue.
Having said that, Asia IRs are four to five times bigger than those in America and have been nothing but successful in Manila, Singapore, Korea and Macau with Japan also focusing on the development of IRs, according to Mr. Tash.
Now Europe are looking to develop IRs, with two opening within the next five years in Cyprus and Greece. If constructed properly and developed like those in Asia and America, then they will definitely be successful since Europe is the number one place for gaming.
However, Andrew Tottenham raises his suspicions on the success of the Cyprus IR, stating:
"Casino subsidies all the other activities. It's no accident that in Europe most of the convention facilities are owned by cities or states, they are not owned by private entrepreneurs so it really is a case of - How do I make this work? So,I look at something like Cyprus for example, it's going to have 500 rooms. Now, obviously the casino cannot succeed with visitation of an average of 80% - it cannot succeed with just people in the hotel. So, what do you need? You need people in the surrounding hotels to come and visit and you need a local population to visit. In effect it's those people who are not using the hotels who are subsidising all the other people who are staying at the hotel were the return of investment is not so high"
Limassol will be unable to support the investment with just visitation, however, he does think Athens will manage as they have
a good population number, high spend per visit and reasonable hotels.
On the other hand, Alidad Tash thinks that “Cyprwill be ablus e to attract VIP players from China as its owned by a Chinese company” and therefore hope to drive in some of the VIPs.
He adds that if Europe looks to add IRs to their portfolio then they must look into expanding in central areas such as Spain or Malta and also the possibility of a Metropolitan area.
There is doubt whether Europe IRs can have the same success as Asian and American IRs in terms of their overall impact but they will still manage to drive a net profit.
Both of these skillful specialists will feature in SiGMA's upcoming publication highlighting their accomplishments in the '100 years of experience in gaming' special.
About SiGMA Europe Virtual Expo:
The future of events is here. SiGMA Europe is delighted to announce, for the very first time, an innovative new Virtual Expo taking place on 24th and 25th November, 2020, from the comfort of your own screen. Hot on the heels of the success of the SiGMA Asia and SiGMA Americas Digital Summits, we are elevating your online event experience even further in the form of a fully interactive, state-of-the-art virtual events space, including a brand-new cutting-edge expo floor. Check the full agenda here and register for free!
