SPECIAL FEATURE: Where to go now for Nagasaki and Casinos Austria? (part 5)
Nagasaki Prefecture signed a Basic Agreement with Casinos Austria International Japan (CAIJ) on August 30 for the development of an integrated resort at Huis Ten Bosch in Sasebo City, Nagasaki. But the process has been controversial to say the least, with two rival CAIJ bidders crying scandal over the decision.
In this special five-part report released Monday through Friday this week, we take a closer look at Casinos Austria and speculate on what might happen from here on the way to the creation of Nagasaki’s very first integrated resort.
Mon Sep 13, 2021 Part 1: Introduction and background
Tue Sep 14, 2021 Part 2: IR operational capabilities
Wed Sep 15, 2021 Part 3: Financial capacity
Thu Sep 16, 2021 Part 4: Meeting Japan’s Expectations
Fri Sep 17, 2021 Part 5: Conclusions and challenges
Part 5: Conclusions and challenges
It has been an interesting week to examine what awaits CAIJ in the delivery of its IR to Japan. Today, we summarize Parts 1-4 of this series, formulate conclusions, outline challenges, and present a roadmap for what needs to happen in Nagasaki for an IR to finally open its doors.
- Develop the “land use plan”
CAIJ is to work with Nagasaki Prefecture to develop the “Zone Development Plan” to be submitted to the Japanese Ministry of Land, Infrastructure, Transport and Tourism by April 28, 2022. This collaborative process will be a challenge, requiring goodwill and mutual trust and understanding from both sides, especially given the huge differences in cultural and business practices between Japan and Europe.
- Start thinking like a big Asian-style infrared operator
Casinos Austria has operated small European-style casinos for decades. It’s in their DNA. It has to go totally and they have to start thinking big – thousands of hotel rooms, hundreds of table games, thousands of slots, hundreds of F&B outlets. Ten thousand employees. Multi-billion dollar budgets. All for a goods. This will require a change in mindset and the hiring of senior executives with a wide range of skills and experience from this side of the planet.
- Solve the financial problem early
As pointed out on Wednesday, the funding problem here is enormous. Casinos Austria has some funding capacity within its management, but it will need more, much more. They will need to quickly hire people with experience in dealing with Japanese banks and people who have raised billions in Macau, Singapore and / or Las Vegas.
- Access dynamics
The CAIJ will have to find How? ‘Or’ What to efficiently get over 20,000 people a day (and their money) in and out of their property at Huis Ten Bosch. Nagasaki has never seen even a tenth of such visits. Considering the region’s transportation challenges, this is no small feat and could be the defining issue.
CAIJ has to admit that it lacks MICE capabilities and somehow hire them internationally – for MICE experts with Asian IR experience. MICE in Japan is very underdeveloped, so the skills will not be found locally. Again, this must be done early because the only way to have a chance of success is to integrate the MICE strategy. during the development and construction phase, not as an afterthought.
The CAIJ must also admit that it does not have the hotel know-how to manage a hotel with more than 1,000 rooms. But passing the responsibility over to another company with no gaming experience won’t be effective either. The only way here is to bite the bullet and hire senior executives who have worked in Macau, Singapore, Manila or Las Vegas and build a team as quickly as possible. And then really listen to them.
- Japanese CSR
Copying and pasting the CSR program from Europe will not work. The companies to watch here are the six Macau dealerships obsessively focusing on their CSR programs, especially at this time with Macau’s license renewals on the horizon. To do it and do it well will require a concerted three-part effort: first, CAIJ should make the most of what it does in Europe, second, visit and learn from Macau’s excellent CSR programs, and finally , customize everything for Japan (and specifically Nagasaki) by hiring local Japanese CSR experts and tweaking their operational DNA to start implementing Japanese style.
- Impeccable obsessive compliance
The CAIJ has long operated as a monopoly in Austria, and we all know that monopolies lead to appeasement. Given (1) the scandals that have already occurred in Japan such as the 500.com scandal, (2) the angst over the Nagasaki RFP process with allegations of corruption, (3) the enormous reluctance of the Japanese people towards IRs, (4) Internet question marks around Casino Austria’s own track record, and finally (5) Japan’s oft-expressed desire to be “the world’s cleanest IR industry”, the business must not only be flawless, but also be seen to be unmistakably that way. One only has to look at Crown Resorts in Australia to understand what can go wrong.
There is an eight point roadmap for success in Nagasaki. Now let’s sit back, enjoy and see how it all goes!
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