FOCUS

Going green for growth

The push towards a more sustainable global future has certainly received its fair share of knocks over the past four years, with Covid-19 presenting a further major challenge for the environment.

The epidemic has slashed budgets, but also created a whole new wave of single-use plastics and other hygiene products that are now choking our landfills.

That said, the IR market had been and still is taking major steps towards a greener future. The environmental impact of a large-scale resort is potentially major, from food waste to water usage, to energy and litter.

Many operators are now pioneers in seeking to offset the damage with green initiatives.

In the focus section of this magazine, we look at the issue of sustainability seen through the eyes of some of the guests on our “Face-to-Face” interview series in recent weeks.

Frederic Jean-Marie Winckler, executive vice president and chief creative and brand officer of Melco Resorts & Entertainment talked to us about the changing face of luxury fashion.

Customers are demanding more information about where products are sourced to ensure they are ethical and sustainable. While there is also a shift in mentality from the conspicuous consumption that has driven the luxury market for decades.

We also speak to Chris Rogers, a long-time Asia gaming executive who now is following his passion and focusing on improving sustainability in the IR industry.

Rogers admits that the past year has been challenging due to tight budgets, but he’s pushing ahead to a brighter and greener future.

To illustrate just how much IRs consume and dispose of, we bring you an infographic focused on Melco Resorts & Entertainment, which has declared a war on waste.

The company said it saved 9.5 tonnes of plastic waste in its properties in 2019 by rejecting the use of single-use plastics, such as straws and single-use bottles. That’s just the beginning with other major initiatives in the works.

In fact, Macau’s operators have all been making major strides.

Melco recently said it’s pushing ahead with a project with Winnow Vision to bring AI solutions to its properties in order to cut down on food waste.

Winnow Vision is singularly focused on helping the business reduce kitchen waste and cut down on kitchen-related expenses. It uses cameras combined with smart scales and machine learning – the same type of technology that today’s autonomous vehicles use – to analyze food waste in order to determine the losses they represent to the company in terms of both a financial and an environmental impact.

MGM China has introduced what it says is Macau’s first food digester, deploying the ORCA system.

This innovative technology allows the company to dispose of food waste on-site and will digest the organic waste into earth-friendly liquid within 24 hours. It will divert around 398 tons of food waste per annum from the incineration plant.

Wynn Macau has also been aggressively exploring innovative methods to reduce plastic waste. It recently pioneered the installation of the Nordaq 2000 Refilling System, jointly designed and developed by Nordaq and Wynn. The system can meet the significant demand for bottled water in large-scale integrated resorts and represents a big step forward in the field of innovative environmental protection for the industry.

As a result of its 2019 performance, Sands was the only Integrated Resort company named to the Dow Jones Sustainability Index North America and one of only 10 companies in North America named to the CDP “A” list for both climate change and water security.

Once the Covid-19 blip recedes, these initiatives are likely to gather pace, as it becomes increasingly clear that what’s good for the planet can also be good for the bottom line.

Demand for sustainable luxury grows

Michael Penn | Executive editor, AGB Nippon

Frederic Jean-Marie Winckler, executive vice president and chief creative and brand officer of Melco Resorts & Entertainment, sat down with AGB Executive Editor Michael Penn at the end of last year to discuss both the recent trends within the Asian luxury market as well as what the future holds in store.

Winckler says that Asians have been playing a dominant role in the luxury market for some time, although for years this has been partially disguised by the fact that many of their purchases—indeed about two-thirds—were made overseas in Europe, Japan, and elsewhere.

This has now changed. With the onset of the coronavirus pandemic, the dominance of the Chinese luxury market has become obvious, both because most of their purchases have been confined to the domestic market due to the collapse of international travel, and because China has done a much better job handling Covid-19 than most other advanced nations, allowing the economy to grow again.

Digitization has been thrown about a decade ahead into the future by the pandemic.

A characteristic of the Chinese luxury market, in particular, is the relative youth of many of the customers, and among these young people the taste for luxury goods has come early.

In this connection, the pandemic has forced the brand companies selling luxury goods to embrace the youthful digital world in a way that they wouldn’t have done, at least not so quickly, had the more traditional marketing options such as print magazines remained viable. Thus we have witnessed the rapid rise of livestreaming, which turned out to be a highly efficient means of reaching the luxury customers.

In Macau, Winckler sees recovery in the market being driven by premium mass, which encompasses many people with a considerable amount of disposal income, making them ideal targets for the expansion of luxury spending. One immediate result has been that even with far fewer customers coming to Macau in 2020, retail sales in some categories have equalled or even exceeded the pre-pandemic era. This is also partly driven by the fact that many Chinese who might otherwise have spent in Hong Kong are spending in Macau.

Winckler says that there is plenty to be excited about going forward as well. Several distinct movements have been converging.

First, digitization has been thrown about a decade ahead into the future by the pandemic, and this is creating an explosion of opportunities that are only starting to be realized.

One often less-appreciated aspect is that digital formats add a crucial tool that allows companies to create better channels of communication with their customers, both in terms of marketing products and services as well as in allowing the customers to express more directly their own preferences and expectations.

A second movement to watch is how global brands, more keenly aware of how dominant the Asian market has become, are beginning to create products that are either aimed entirely at the Chinese market or at least designed with them first and foremost in their minds. This trend can be expected to gain steam even among the established luxury brands of capitals such as Paris and Rome.

Finally, a third movement flowing into the other two is the recognition of the importance of sustainability. This comes into play not only in terms of the sourcing of the materials used in the products, but also with the growing popularity of secondhand or “preowned” merchandise.

Perhaps in the past such a concern with sustainability might have been unthinkable within a luxury market that prized conspicuous consumption. Traditionally, this has even been a mark of wealth and power. In the 21st century, however, this attitude has become increasingly out of step with contemporary concerns. Brands are now fielding questions from their luxury customers about sustainability issues, and therefore they are obliged to proactively respond.

Covid-19’s silent victim

Felix Ng | AGB Asia Editor

The social and economic impact of the coronavirus should not be understated, however, there is a lesser known victim of the coronavirus that hasn’t received as much media attention over the last year - our environment.

Asia Gaming Brief recently sat down with Chris Rogers, a long-time gaming executive who recently co-founded Kroll Enviro Asia, a company aimed at solving sustainability issues within the integrated resorts industry.

With the coronavirus pandemic plaguing the world, Rogers pointed out that the supply and disposal of personal protective equipment (PPE) has skyrocketed over the last year. PPE, including face masks and gloves have been instrumental to our personal safety and well-being, but it is also piling into our landfills and polluting our oceans at an astronomical rate.

Around 36 pairs of gloves are produced and disposed of each time a person receives a dose of the coronavirus vaccine, said Rogers. With more than 2.5 billion people estimated to receive the vaccine by the end of 2021, that means we’ll be seeing at least 90 billion pairs of gloves added to the world’s landfills just from vaccines alone.

“Every straw that we got rid of, every disposable cup, cutlery, shopping bag has now just been countered by the amount of gloves that are going to be administered around the world,” said Rogers. “I don’t think we will see the full impact of that for another few years.”

Most people and operators that we’ve spoken to have [sustainability] goals that they want to achieve.

Environmental sustainability has been one of the long-standing passions in Rogers’ life. Whilst he focused much of his time in the past with companies developing gaming products and technology, his latest venture has him delivering environmental products to all manner of companies and organizations, including casinos in the Philippines and Macau.

Unfortunately, those same casinos have been dealing with the brunt of the covid-19 pandemic, with closures and travel bans pushing GGR to record lows in 2020. Rogers noted that understandably, the conversation around environmental sustainability has had to be pushed down the line.

“Most people and operators that we’ve spoken to have [sustainability] goals that they want to achieve… but first things first, they have to be profitable and that their businesses are right before they can invest in sustainability projects. It’s been difficult over the last 12 months.”

Looking ahead, Rogers expects that the industry will continue to closely watch developments related to the covid-19 pandemic, but hopes that 2021 will see some stability in the markets, which would allow for companies to have the confidence to reinvest in their businesses again.

“You have to be proactive, you can’t sit back and consume. Our resources aren’t infinite, we have to manage ourselves and our planet, and everything we use much better. We are [the gaming industry] a small part of that but it’s all important, everyone has to do their bit.