Lawrence Ho aims at global casino business for Melco
Lawrence Ho, trim, energetic and 40-something, is establishing himself as a new thinker in the casino sector. Talk to Ho about the future of his company, Melco International, and he keeps coming back to the need for something to be “cool”, in the mould of his cinematic heroes: James Bond, or anything by Sylvester Stallone.
Melco International did not get seriously involved in the casino business until 2004, when Ho partnered with Australian billionaire and casino operator James Packer. After Crown suffered debts from ill-timed investments, Ho had the chance to buy up Packer’s shares, and rename the business Melco Resorts.
Ho now talks about the need to bring more technology and digital savvy into the operations of a casino. In the next one to two years, he plans to unveil a new virtual butler system (named Melvis) that will help guests book tickets and plan trips, even before arriving at a Melco property.
“I like new ideas.,” Ho said in an interview with The Peak magazine. “When we started [in the gaming business], it was dominated by very traditional thinking. I understood that we need certain expertise and experiences. But at the same time, we wanted to try new things.”
The break with the traditional mores of his industry animates Ho. “Our industry tends to be very old … as a young company, we are trying to change that,” he said.
And Ho’s desire for newness, particularly extravagant shows, has led to consternation among his more conservative board members. He loves to bring up the House of Dancing Water, created by Franco Dragone: “We spent US$300 million on it during the global financial crisis. I had board members asking me, ‘are you insane?’”
For Ho, such shows are part of a new era in Asian casinos – as much focused on entertainment and technology as gaming tables and slot machines.
Ho’s main ambition is to build a global business. In 2012, Melco entered into a partnership with a subsidiary of SM Investments to create City of Dreams Manila. Ho now estimates that the Philippines operation is worth about 15 per cent of earnings to Melco International. He initially thought it would be worth only 5 per cent to 10 per cent.
City of Dreams Manila was a billion-dollar investment in 2012; now Ho regards it as his base in Southeast Asia. The success of the operation has whetted Ho’s appetite for more international projects.
In June, Melco International announced it had bought a controlling stake in a casino project in Cyprus – the company has received a 30-year licence for an integrated resort in Limassol, Cyprus’ capital, as well as 15 years of exclusivity. Ho says the Cyprus project also means an opportunity to engage tourists from the Middle East, as well as Europeans and Russians.
But it is Japan that gets Ho really animated. With Prime Minister Shinzo Abe’s new mandate, Ho is confident that legislation around integrated resorts will be pushed forward in the next calendar year. “Once the implementation bill is passed, that is when the beauty contest – the bidding – will start,” he said.
An emphasis on entertainment and modernity is what will be the winning hand when it comes to getting those coveted first concessions to run casinos in Japan, Ho said.
“We’ve been waiting a very long time,” he said. “To have the opportunity to build something ultra cool and ultra modern, but also pay tribute to the rich history; it’s a good opportunity.” Beyond casinos, Ho sees tourism in Japan as a largely untapped market. He is incredulous at the fact that, as recently as 2000, there were only a few million tourists a year in Japan. That figure has climbed to more than 20 million a year, but Ho reckons this number will keep rising.
He is not alone in thinking this way. Sheldon Adelson, a power player in the global gaming business, has made no secret of his desire to build casinos in Japan, especially Tokyo.
Yet, Ho is confident that his approach will succeed, and is already thinking of working with Japanese architects to create architectural marvels that celebrate Japanese history and modernity. “That’s the beauty of Japan – the technology is there and I can go wild in Japan,” he said.
For all his expansive visions, Ho is relatively unenthusiastic about growing in Macau, which provides the bulk of his revenue. Yet he shows no interest in developing projects in Hengqin Island, the area next to Macau that has been earmarked for non-casino resorts and development.
In 2018, Melco’s new building, Morpheus, an 800-room hotel with facilities, will open at the City of Dreams in Macau.
Designed by the late Zaha Hadid, Morpheus is suitably fantastical, with modernistic looks contrasting sharply with its surroundings. The new landmark Morpheus building could become something else altogether. “We’ve talked about Morpheus … launching it as a hotel brand. So we’re interested in all these things,” Ho said.
“We’ve always looked at ourselves as an entertainment company … unlike some of our competitors that are very focused on the casino business,” he said. “Ours is more focused on getting to the younger crowd.”
These are the excerpts of an article in the December issue of The Peak magazine, available by invitation and at selected bookstores.