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Galaxy Entertainment Group - a Hong Kong-listed Macao casino operator controlled by Hong Kong tycoon Lui Che-woo - has set its sights on Zhuhai's Hengqin New Area, one of three districts covered under Guangdong province's new pilot Free Trade Zone (FTZ).

But casinos are out, as Galaxy plans to opt for a brand new life there - turning Hengqin Island into a mass resort-leisure attraction.

The 106-sq-km new economic strip - to be officially set up soon along with Guangzhou's Nansha and Shenzhen's Shekou districts under the Guangdong FTZ - is already the focus point for Hong Kong, Macao and global investors lured by the financial and trade incentives on offer.

So far, Galaxy is the only Macao company with a gambling license that has been granted a piece of land on Hengqin, which lies on the outskirts of Zhuhai and with a land area three times the size of Macao.

"Galaxy will develop resort-and-leisure facilities on Hengqin, and further expand its non-gambling businesses," Kevin Clayton, the group's chief marketing officer, told China Daily.

The facilities are scheduled to open in 2017, with an estimated investment of 10 billion yuan ($1.6 billion).

Clayton stressed that Galaxy, which had been heavily reliant on its casino operations for cash flow, will now plow more than 90 percent of its investments into non-gambling businesses, not only on Hengqin Island, but also in Macao.

Galaxy's fortunes, like those of other major casino players in Macao, have been badly dented as high-rollers from the mainland stay away amid the central government's massive crackdown on corruption and extravagance.

The number of mainland VIP gamblers has plummeted, with Macao's overall revenues from gambling diving by 39 percent in March, year-on-year. It was the 10th consecutive month that Macao had suffered such a big drop in casino income.

To make up for the losses, Galaxy is actively looking for ways to diversify. The second phase of the group's resort project, Galaxy Macau, and a new resort, Broadway Macau, will open on May 27 this year.

Phase 1 of Galaxy Macau, which opened in 2011, has been drawing about 35,000 visitors daily on average. The second phase is expected to attract an additional 65,000 visitors every day.

While Galaxy Macau will retain its luxury appeal with 5-star hotels, such as JW Marriott and Ritz-Carlton, theaters, and top-end retail brands, Broadway Macau will offer more affordable hotels, street shows and authentic Asian cuisine.

Clayton said the company is looking for "brand" partners from the mainland, including arts, cultural or fashion brands. "There's no way to demonstrate Asia without demonstrating the modern China," he stressed.

Raymond Yap Yin-min, director of Galaxy's international premium and mass-market development division, predicted that revenue from the group's non-gambling operations would continue to rise in the next few years. He cited Macao's hotel industry, saying that the city's room supply would increase by 40 percent within two years.

Mainland tourists accounted for more than 60 percent of Macao's 31 million visitors last year, but less than 1 million of them were casino high-rollers.

"With the number of VIP gamblers on the decline, the customer base has changed dramatically," Clayton said. "Previously, the majority of our visitors were VIP guests, but now we see a surge in the number of mass-market visitors. In future, we'll try to attract as many mass-market visitors as possible, mostly those who stay overnight or come on day visits."

Yap said Galaxy is also trying to get more direct flights between Macao and the mainland launched, and is working with Air Macao and new airlines to achieve this goal.

"Last year, we introduced five direct routes to the mainland and, this year, we will add another six. Besides, we're in talks with mainland travel agencies to promote our packages," he said.

According to Galaxy's annual report released on March 19, the group's revenue grew by 9 percent to 57.6 billion yuan in 2014.

Clayton attributed the result to the group's efficient management as well as the increase in mass-market visitors to Macao. "Everybody is chasing after the Chinese mainland market as it's the major source of customers," he said.

"The Chinese mainland middle-class numbers between 200 million and 400 million, but they're highly fragmented. So, our new facilities will have to ensure that people with different consumption power can find suitable hotel accommodation, shops and performances that they'll enjoy and can afford."

To lure more visitors to Macao, Galaxy is launching media campaigns across Asia, mostly through digital platforms as today's travelers are tech-savvy and prefer to gather information through digital channels.

wangchao@chinadaily.com.cn

Visitors walk past a scale model of the Galaxy Macau casino resort. Galaxy is strengthening ties with mainland partners to promote its non-gambling businesses among mainland residents. Brent Lewin / Bloomberg

(HK Edition 04/17/2015 page10)