BETTING ON THE CHINESE
Las Vegas is wagering that new Asian-themed casinos and hotels, along with direct air service from Beijing, will greatly increase the number of Chinese filling hotel rooms and Baccarat tables, reports Amy He from New York.
Sin City is getting ready for an invasion of Chinese. It hopes.
Las Vegas, the gambling capital of the US that has long been popular with Chinese, is aiming to attract more of them with two new casinos and hotels catering to them and the first direct flights from Beijing.
“I can’ t recall a time when one market segment has generated so much excitement,” said Michael Goldsmith, vice-president of international marketing at the Las Vegas Convention and Visitors Authority. “Just the sheer numbers and the potential and the growth. There’s a tremendous amount of excitement in the community.”
China is the eighth-largest origin market for Las Vegas, with the number of visitors almost quadrupling in the last decade. There were approximately 206,000 in 2015, up from the estimated 188,000 in 2014. The country makes up 3.5 percent of all international visitors to the city, according to the tourist board’s most recent estimates.
“We haven’t sat down and said, ‘ We want X number’ — I just keep saying we want more,” Goldsmith said, “as long as we continue to grow and pace along with what’s happening with the United States.”
Hainan Airlines is scheduled to start direct service three times a week to McCarran International Airport on Dec 2, one day before the opening of the Chinese-geared Lucky Dragon Casino and Hotel. The airport is about five miles south of downtown Las Vegas.
The city has long wanted a direct flight from China, and worked on getting Hainan’s service for approximately four years. Tourism officials expect that the new service will not only bolster visitors directly from China, but will allow the city to more accurately track how many Chinese visit.
“One of the challenges that we have is accurately counting our international visitors, especially from countries that don’t have direct air service. The thing that direct air service provides us with is much easier ability to quantify the visitors coming to Las Vegas,” Goldsmith said.
How much importance Las Vegas puts on China is reflected by the city’s tourist board devoting a staff member solely to handle its China marketing effort. It also mirrors the “China welcome” programs that resorts and casinos on the Strip are offering to attract Chinese tourists.
The tourist board works with the University of Nevada Las Vegas’ hospitality program to develop seminars and education programs for resorts and retailers to make sure that they are China ready and culturally sensitive, stressing that financing China marketing efforts is a necessary investment, Goldsmith said.
“One of the things we found when we got together with our resort community was that some people said, ‘ Wow that’s quite an investment. I didn’t realize we needed to do this. Maybe that’s not for us,’” Goldsmith said. “So what we thought was equally important is that the properties and attractions that are interested in appealing to the Chinese visitors realize that there’s an investment necessary to do that.”
The Lucky Dragon hotel and casino are set on three acres at the north end of the strip, with 200 hotel rooms. The 27,000-square-foot casino floor has 40 tables and 300 slot machines. Domestic Chinese gamblers “overwhelmingly” prefer to play Baccarat, so approximately 80 percent of the tables are Baccarat, with some Blackjack, pai gow, and roulette games, said Dave Jacoby, COO at Lucky Dragon.
The casino also will have several feng shui designed private gaming parlors, five Asian-inspired restaurants, a tea garden with a list of tea curated by Las Vegas’ only tea sommelier, and signage staff for guests from Asia and English-speaking guests.
Goldsmith said that Lucky Dragon’s main purpose — servicing Asian clientele and specifically Chinese — is unique in Las Vegas, and its boutique size allows them to go after a specific market segment with more dedicated resources.
“I think they’re going to be an example for a lot of properties that say, ‘Wow, this is how they’re doing it, and this is what we need in order to be successful,’” Goldsmith said.
The Lucky Dragon will face competition for Asian tourists from the Resorts World of Las Vegas, which will begin construction at the end of this year and is scheduled to open in 2019.
With an estimated budget of $4 billion, the Asianthemed Resorts World will have more than 3,000 hotel rooms in multiple towers, convention space, movie theatres, a 150,000-square-foot casino and a 30,000-square-foot lake as part of a Chinese garden spanning the grounds.
It is being developed by the Malaysia-based Genting Group, which operates a Resorts World there and also has resorts in the Philippines, Singapore, the UK and New York.
Lucky Dragon’s developer is a privately held entity known as the Las Vegas Economic Impact Regional Center. It was built with EB-5 funds, an investment program that grants permanent US residency visas to those who create at least 10 full-time jobs and invests between $500,000 to $1 million.
Though EB-5 investors in city projects come from Europe, the Middle East and Asia, the vast majority of the funds are from Chinese sources, said Jacoby, who is also the COO of the Las Vegas Economic Impact Regional Center (LVEIRC), which helps support EB-5 fundraising for other projects in Las Vegas, such as the Downtown Grand Hotel and Casino.
Jacoby said that while Las Vegas’ casinos realize the importance of Asian guests, they don’t make up their core business or cater to them.
“All of the casinos here on the strip are largely built by Americans for white Americans, frankly, with some that have small sub-sections for Asian players. Some may have a separate Baccarat room; some may have a Chinese restaurant. One or two places even have two. But that’s about it,” he said.
“The majority of these places are built for Blackjack and slot playing, Americans who want to go to the pub or go to a nightclub, which isn’t traditionally what Asian guests like to do when they’re here.’’
Jacoby said Lucky Dragon isn’t going after “the top, top tier guy flying in by private jet from Beijing or Shanghai who is probably going to the Wynn or the Venetian (casinos), or two or three other places in town’’.
“If you’re the 1 percent, private- jet type of customer, you’ll get the authentic experience that other players don’t get because you qualify for it and you’re paying for it. So at Lucky Dragon, we take the cultural touches of the top 1 percent — language, food, general service standards — and provide that to them as a base product of what’s in our DNA for everyone, and kind of cater to the rest of the 99 percent in the way they’re being ignored,” he said.
In addition to putting money into the EB-5 visa program for projects in Las Vegas, Chinese also are investing more heavily in other Las Vegas real estate, including second homes and homes for their children studying in Nevada.
Betty Chan, a Las Vegas Realtor who works with Chinese families, said her clients often are attracted to the low home prices in the city. “They see that the prices here are so good and the rental incomes they can get are so much better than what they can get in China, so they invest,” she said.
She sells houses that range from $200,000 to $300,000, and many are two-story properties in high-end communities that she said the Chinese favor.
Chan said she recently worked with a Chinese family that owns a hotel chain in China, who needed a house for their son who is going to a hotel management school in Las Vegas.
Randy Char is the president and owner of Char Luxury Real Estate, a luxury boutique brokerage that specializes in high-end luxury clients. He is selling 64 units in the new Sky Las Vegas, a 45-story luxury condominium on Las Vegas Boulevard between the Lucky Dragon and the upcoming Resorts World.
The units go for $300 a square foot, an attractive price for investors compared to similar properties in New York that may fetch nearly $3,000 per square foot, $1,500 in San Francisco, or $1,000 to $2,000 in Hawaii, according to Char.
Sky Las Vegas represents a chance for the Chinese to buy a piece of Las Vegas Boulevard, where few properties are available for purchase, said Char.
“The one thing I do know about the Chinese is that they’re very smart investors. They do a tremendous amount of research,” he added. “They are savvy, they go on the internet, they look at the macroeconomic factors. The misnomer that they’ll just buy anything is just not true.”
We haven’t sat down and said, ‘We want X number’ — I just keep saying we want more.” Michael Goldsmith, vicepresident of international marketing, the Las Vegas Convention and Visitors Authority
An artist’s rendering of the Lucky Dragon resort and casino, which will feature feng shui-designed gaming rooms to appeal to Chinese tourists.
The Las Vegas tourism industry is hoping to fill hotel rooms with Chinese visitors by offering special amenities.