The building of a Japanese IR
In the third of their five part series on the development of Japanese integrated resorts, casino and IR experts Dr Glenn McCartney and Dr Andy Nazarechuk look at the attractions a Japanese IR will need to consider if it is to thrive.
By Dr Glenn McCartney and Dr Andy Nazarechuk
The most important decision when building an Integrated Resort (IR) is determining what components to add to the product and service mix. The IR is a distinct tourism product in that there are multiple products and services all under one roof with the ability to be packaged, priced and positioned to suit an array of visitor profiles. The challenge is in determining the optimum mix of products and brands to attract first time and repeat customers willing to stay longer and spend more.
The casino is naturally at the core. Legislation and consumer tastes will determine the Japanese casino floor mix. Casino legislation limits tables in Macau and Singapore casinos. At Macau’s handover, the slots on offer to customers were basic, built for western audiences and numbered very few. Placed on the fringes of the main gaming floor, they provided minimal revenue. Today they feature an array of Chinese characters, progressive features and stadium play with the technology linking to the patron’s comfort of using their smartphone devices.
With the tremendous appeal of pachinko and sports betting in Japan, these will be obvious gambling products to include in any Japanese IR. But a crucial decision will be to determine which other facilities, amenities, services and brands can best entice Japanese IR patrons to spend more time and share of wallet across the integrated resort from gaming to non-gaming.
As destination resorts, IRs also appeal to regional and international visitors with products that suit local and international tastes. In Japan, the delivery of quality is probably more important than in any other destination. The Japanese insist on a high level of quality. When they do not experience it, they don’t complain – they just don’t come back.
Japan isn’t alone in this regard, but it will be all the more important for Japanese IRs given the significant investment to be made to bring Japanese patrons in. Peel away the glamorous architectural IR facades, the ultra luxury of suite rooms and notoriety of a fine dining restaurant – ultimately it will come down to the visitor’s experience and how the individual is treated by trained staff. Japan’s education and training programmes for the hospitality and gaming industry will require significant ramping up to deal with the immense staffing needs and skill sets of the IR.
A person’s perception of luxury will depend on patron profile. It may not be the purchase of luxury brands but time spent at the IR’s “Onsen” (Japanese hot springs) – a product of great importance to the Japanese for relaxing and socialising. It should also attract foreign guests. In the town of Ibuski, locals and visitors alike bury themselves in hot sand heated by a nearby volcano, then take a long shower before finally entering the Onsen to soak away their stress and improve their health. While many international hotels are eliminating tubs and replacing them with showers, this would be a mistake if you want to meet the needs of the Japanese clientele. For example, in New York, the Kitano Hotel has tubs in every room that are deeper than a standard American tub so that their Japanese clients can soak in their rooms.
The Japanese IR will also need a spa that provides Japanese-style massages such as “Shiatsu” which features finger acupressure that relaxes muscles. There are a wide variety of massage techniques in Japan featuring seaweed, lotions and other exotic products. With the high concern the Japanese place on health and wellness, this theme will be an important one within the IR to attract Japanese guests (and foreigners).
Again, quality will be key, from food offerings to the level of cleanliness of each facility. A successful IR in Japan must have the cleanest facilities and highest levels of sanitation if it hopes to succeed.
Finding the right design balance between traditional, modern and “wow” features will be an important consideration too. Large rooms in IRs will prevail, being incrementally larger and more luxurious depending on guest importance. But there is also a need for a Ryokan-style hotel room. This type of room would feature tatami mats, shoji paper screens and of course a private soaking tub. The service in these types of rooms would feature food and beverage provided in a traditional manner. Guests of these rooms would wear a Yukata, a traditional cotton robe, offered in a wide range of colors depending on the age of the wearer. This type of room would be a premium product for higher end clientele, but would also be the type of experience a tourist might seek.
Another cultural difference in a Japanese hotel room would be in regard to the amenities provided. In many countries it is common to find a low-cost toothbrush, shampoo, soap and a few other minor items in the hotel room. With some hotels pitching “green” or having sustainability measures, many amenities might only be available on request.
In Japan, the expectation is that everything a guest would need during their stay is provided in the room. In a typical Japanese hotel room there would be comfortable slippers, robes and even pyjamas for each guest. If a new IR doesn’t provide a full amenity package in each room, operators will learn the hard way that Japanese guests demand this level of service.
Sport and entertainment will also be key features for Japanese IRs. Unlike Las Vegas which boasts many of the United States’ top nightclubs, Macau has only a few nightclubs with DJs. Instead, the entertainment of choice for Macau’s mostly Chinese patrons is karaoke clubs and this won’t be dissimilar in the Japanese IR. In keeping with Japanese traditions, there is an opportunity to offer “Geisha” style entertainment facilities. Of course, a westerner’s first thought may be that this would be some type of illegal activity, but in fact Geishas are trained artists with musical skills. Geishas traditionally play a Shamisen (a three-string guitar), sing traditional folk songs, draw and also play games with their guests. The entertainment provided by a Geisha creates a memorable experience for all involved.
Another activity that will help the Japanese IR capture the highend market segment is golf. The Japanese absolutely love playing golf, but in Japan it is very expensive and extremely difficult to get tee times. Even when you are on the course, you are expected to play well and quickly so as not to slow down the players behind you.
Multi-level driving ranges are common in Japan and golfers practice regularly to improve their play on the course. It is common for Japanese golfers to fly to regional destinations such as the Philippines and play golf for the weekend. This weekend trip can cost less than one round of golf in Japan. An IR with one or more golf courses will become a magnet for Japanese high rollers. Steve Wynn built his exclusive Shadow Creek golf course in Las Vegas specifically to meet the needs of his high-end players. MGM Grand features a full service Topgolf entertainment complex, a high-tech range that tracks shots. Here, golfers can hit golf balls, enjoy the pool, have a drink at various bars, attend a concert or host a private event.
Does a Japanese IR need a sports arena? The answer is “of course”, but with an emphasis on sumo. Sumo is a popular sport in Japan that attracts a betting audience, which is the type of clientele any casino will desire. Additionally, sumo wrestling is very popular nationwide so media coverage would provide an additional opportunity to promote the IR. Sumo can be further expanded as a means to interact with guests through VIP bespoke events and various promotional activities within the IR. Basketball, baseball and football are all popular, so a mixed purpose arena able to cater for sports and music is essential – not forgetting the array of J-pop as well as international pop and rock stars that continue to put Japan on their tour schedules even today.
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IRs offer a wide range of locally and internationally branded restaurants, retail outlets and hotels. Food and their own home-style cuisine are hugely important to Asian audiences. Ethnic cuisines are also important as seen with Chinese consumers, whether from the north or south of China. In Japan, the most important cuisine is sushi and sashimi, but noodle restaurants are also popular across the country. There will be ethnic dishes and renowned chefs within this deliberation of restaurant decision making for the IR.
Non-gaming – be it retail, cuisine, entertainment or relaxation – has become an increasingly key asset around which IRs develop their marketing messages, with gambling at its center. Gambling advertising is prohibited in China so non-gaming IR advertising is a common tactic. Complimentary policy and rewards will be important marketing tactics for Japanese IRs too, just as it is for any global IR development. Even before opening, the Japanese IR will be keen to secure a loyal patronage and growing database. Around this, gaming and non-gaming incentives will be given depending on gambling profile.
In Japan, true loyalty will go beyond the points, in that the patron will want to experience a real sense of reward, authentic hosting and quality service. Naturally, the process of finding the perfect product mix for an IR is a complex one and requires extensive research, focus groups and thoughtful decision making to ensure that when facilities come online, patrons frequenting the property are properly catered for.
