Galaxy aiming for the stars
You might expect casino billionaires to experience their properties differently from the thousands of others who pass through the doors each day.
Take Galaxy Entertainment vice-chairman Francis Lui Yiu-tung, 55, who spent a recent weekend with his wife in the presidential suite of the Okura Hotel within his five-month-old, HK$16.5 billion Cotai resort complex.
'It was nice,' Lui said, then paused. 'The ice cubes were too small.'
Lui's attention to detail is part of a much bigger, bolder goal for Galaxy, a company he said that 'could one day become the leading Asian gaming operator'.
'With this vision in our minds, we are driving ourselves every day to make sure we will be able to achieve that position. It's not easy, because we have so many good operators around town,' Lui said.
Ten short years ago, Galaxy was a relative unknown among the 21 companies that submitted bids for Macau's first post-monopoly gaming licences. Its main shareholder, Lui's father and the company's current chairman, billionaire Lui Che-woo, 81, had decades of experience in construction, real estate and hotels; but no track record in the casino industry. Galaxy won entry to the market largely because of an eleventh-hour tie-up with casino and convention giant Las Vegas Sands in February 2002, but the partners disagreed over strategy and by December of that year had gone their separate ways.
The six outfits that ended up with Macau gaming licences included five of the biggest names in the casino industry globally - Sands, Wynn and MGM of Las Vegas, Crown of Australia, and SJM Holdings, a unit of Stanley Ho Hung-sun's former Macau gaming monopoly. Galaxy was the only one of the six with zero experience in the casino business.
'When we started our journey in Macau a lot of people just saw what we didn't have. They said: 'You guys don't know how to do gaming,' and they wrote us off, like nobodies. What they actually failed to see was that out of the six operators, we are the ones who really understand the China market,' Lui said.
'We know how to build, we can buy material very cheap. We're a real estate developer, a hotel manager, and we're hotel investors. All these actually combined to make a pretty big advantage over a lot of people.
'We also have the heart to be able to say if there's something we don't know, we don't pretend that we will manage it. We hire professional people like the Mike Meccas [chief operating officer] and Bob Drakes [chief financial officer] of this world to come and work for us.'
Indeed, if the odds against Galaxy were long, its big bet on Macau has paid off in spades - both for the company and for the Lui family, who still own about 53 per cent of Galaxy's shares. Today the family's traditional property-development business, K. Wah International, has a market value of HK$5.6 billion and Galaxy Entertainment's market value is more than HK$70 billion.
After the opening of its second fully owned property in May, Cotai's Galaxy Macau, the company now ranks No 2 in the world's biggest casino market by its overall share of gaming revenue.
From July to September, the first full quarter of the new 2,200-room resort's operations, company cash flow nearly tripled from a year ago to HK$1.79 billion. Third-quarter revenue surged 148 per cent from a year ago and 67 per cent from the previous quarter to HK$13.29 billion.
Total wagers on the Galaxy Macau's high-stakes baccarat tables for the quarter were HK$163 billion, or about HK$1.8 billion per day.
Despite the recent gloomy global economic outlook, Francis Lui sees no signs that things are set for a slowdown in Macau.
'We know what's going on in Greece and Spain and Italy, and the US,' he said.
'You take a look at the track record China has produced in the last 10 years - the Asian financial crisis, Sars, the 2008 financial tsunami, natural disasters - and ask yourself: 'Did that actually dent the Macau market at all?' No. We recovered very quickly,' Lui said.
Galaxy is only the third major property on the Cotai strip (after the Venetian and City of Dreams). But rivals are waiting for government approval to start construction on at least four more massive casino hotels.
So how does Galaxy move from No 2 in Macau to No 1 in Asia?
'We need to maintain a sense of urgency to make sure we do things quicker, faster, better. This way we can stay ahead of the market,' Lui said. 'We need to continue to remain hungry.'