Brand-name hotel portfolio not always in casino IR’s favor

June 9, 2022 Macau Casino & Hotel

Many of Asia’s integrated resorts boast a wide range of hotel options, but does having the big name global brands bring an operator an advantage?

Not necessarily so, argues Ben Lee, managing partner of IGamiX Management & Consulting.

The relationship between the name recognition that luxury hotels confer and the downside of high internal transfer costs is a delicate one and it’s a business model that some are now eschewing.

“It gives variety when properties believe their own brands are not well known enough,” Lee said. “If you are a large resort you can give guests a range of brands from low-to-high, but if you are a smaller resort you do not want to cede your ability to be flexible.”

While an in-house hotel is a very useful tool for any casino, Lee said having a big-name external brand is more debatable, with the advantage perhaps tipped in the hotel group’s favor.

Three of Macau’s six operators feature external brand hotels. Galaxy Entertainment’s complex hosts The Banyan Tree, the Ritz Carlton, The Marriott and the Okura, as well as its own-brand hotel and it will soon add Singapore’s Raffles. Melco Resorts & Entertainment now only has The Hyatt after converting the Hard Rock Hotel into the Nuwa Hotel and adding its iconic Morpheus own-brand, while Sands China’s properties host the Four Seasons, The Sheraton, the Conrad and the St. Regis.

Glenn McCartney, professor of integrated resort management at Macau University, has written that these luxury brands were attracted by the lure of access to lucrative travel markets, such as China.

A traditional hotel model looks to external sources for its patrons, while in an IR, the hotel has to manage internal and external demand.