MACAU LETTER:Niall Murray landed in the global gambling industry as a hotelier when casinos began to move upmarket, writes MARK GODFREY
“WE FELT a bit of a tightening in August and October” but business is growing now, says Irishman Niall Murray, director of operations development, joint ventures and new businesses at SJM Holdings. It is the largest player in the Macau’s €12 billion- a-year gambling industry.
The Chinese territory has overtaken Las Vegas as the world’s top gambling strip on revenue, even though some of its 600,000 inhabitants grumbled to their newly appointed chief executive/ruler, Fernando Chui Sai On, that casino developers have moved too fast too soon.
From Santry, Dublin, Murray is the man who gets casino complexes up and running on time and to specification. He oversaw the opening of the Venetian Macau, a piece of Las Vegas transplanted to the South China coast. Proof surely of his faith in Macau’s future, he is currently getting the SJM-owned L’Arc and Oceanus casinos ready for opening.
Murray (40) landed in the global gambling industry as a hotelier when casinos began to move upmarket in the last decade.
After graduating in hotel management studies from the DIT on Cathal Brugha Street, Murray worked at some leading New York addresses, the Ritz Carlton Central Park and the Four Seasons, before heading west, to Las Vegas casinos seeking new markets by reinventing themselves to five-star hotel standards.
After helping to oversee the overhaul of 3,000 rooms at the iconic Caesar’s Palace, Murray took charge of training and development at the Venetian, a colossal new development by billionaire gambling mogul Sheldon Adelson.
He explains how the luxurious Venetian revolutionised the gambling business by applying the same high standards to both casino and hotel, hitherto a cheap add-on for tired gamblers. A huge convention centre helped to ensure that occupancy of the Venetian’s 3,000 suites stayed at 98 per cent year-round.
In 2003, Murray was going east, to oversee the set up of Adelson’s new Sands casino-hotel in Macau. It was the first international operator allowed into Macau, part of a plan for a harder-earning and more lawful Macau when it returned to Chinese rule in 1999.
The monopoly of SJM, led by the colourful and controversial Stanley Ho, was broken. Within 13 months of opening, the Sands had recouped its $260 million construction cost. Management “kept expanding the tables” to cope when 40,000 gamblers flooded in on the first day.
Macau’s casinos have been dependent for their success on mainland China for the tourists who pour over the border from Zhuhai, a nondescript urban sprawl of warehouses and malls. To keep a rein on gamblers, mainland authorities restrict visas to two days.
Murray says the bulk of numbers at local casinos are middle-class mainlanders who spend the day on the main floor playing baccarat and Sic Bo, a Chinese card game played electronically. A lucrative 2 per cent of visitors are high rollers from Hong Kong, the mainland and Taiwan.
Chinese and Las Vegas gamblers are totally different, Murray says. There’s none of Vegas’s cocktails and cognac: for the Chinese it’s “tea and focus . . . This is very serious business for them.”
Macau last year got more mainland tourists than did Hong Kong. Murray believes the relationship between Macau and Beijing has been particularly close. That may be down to the influence of Beijing favourite Stanley Ho, whom Murray admires as a bridge in Macau’s transition from Portuguese to Chinese rule.
“Macau is still dependent on mainland China visas. . . they have control on the numbers.” High numbers from the mainland, he cautions, do not necessarily mean rich takings at the casinos. An annual Chinese New Year flood of mainlanders come to gawk, not to gamble.
Still, Murray’s original employer, the Sands, remains successful, outperforming its Las Vegas parent in revenue. Adelson’s later project, however, the Venetian Macau, with its 3,000-bedroom hotel rooms and giant mall, has been over- ambitious. The gamblers poured in for 550,000 casino games.
Murray did well, establishing Murray International to consult on huge business opportunities created by the casino: there was neither a laundry nor a drinks supplier in Macau big enough to supply the Venetian.
Murray later joined Stanley Ho’s SJM to help relaunch the Gran Lisboa, the company’s ageing flagship. The systematic perfectionism of the newcomers had forced Ho to up his game. So he hired Murray, who had perfected a critical management system of getting casinos and hotels open to specification.
SJM today remains the leading local player, with about 34 per cent market share next to Adelson’s 25 per cent. Murray thinks SJM’s approach of smaller properties – it has 18 casinos in Macau – is smarter than the white elephant tack of the Venetian.
“The era of the mega $1.5 billion casino project is over,” he says.
Proof of that, the Venetian Macau has been unable to take business from mainland city convention centres charging a 10th of the Venetian’s fees.
The 1.2 million sq ft convention centre was meant to fill the Venetian and other hotels along the Cotai strip, land reclaimed from the sea. Adelson is now trying to refinance the project and finish the shells of buildings destined to be five-star hotels on this strip. “Cotai should have been built over 12 years, not two,” says Murray.
Macau, and China’s gamblers, may take some time to digest the city’s portfolio of casinos. Murray meanwhile is looking across the border, to the possibilities of managing a new wave of mainland resorts.