Product differentiation: Key to Macau's gaming revenue growth

Zheng Gu
January 2006
Journal of Revenue & Pricing Management;Jan2006, Vol. 4 Issue 4, p382
Academic Journal
For a tourism destination, the purpose of revenue management is to maximise the amount and minimise the risk of tourism revenue. This paper demonstrates how Macau can maintain a stable gaming revenue growth via product differentiation in the face of competition from emerging gaming destinations in Asia. Macau has recently opened its gaming market by bringing in Las Vegas gaming operators. While the introduction of Las Vegas-style casinos should help modernise Macau's gaming industry, Macau's market advantage is being threatened by the proliferation of Las Vegas-style destinations in the region. This paper proposes a revenue management strategy for Macau. It suggests that Macau should distinguish itself from other competing destinations by providing differentiated gaming service products. Enhancing its traditional VIP room operations is an effective way to achieve this goal. Implementing such a revenue management strategy, Macau will be able to preserve its risk-taker market and minimise the revenue risk posed by upcoming competition in the region.


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