Alvin Chau: Suncity’s supremo speaks

This article first appeared in the Jan/Feb 2015 issue of World Gaming magazine.

Alvin Chau has traditionally played hard to get with the media, so it was with great pleasure that we took the opportunity to sit down with the CEO of Macau’s largest junket operator, Suncity Group. Mr Chau ranks alongside the likes of Sheldon Adelson, Lawrence Ho, Pansy Ho, Angela Leong, Francis Lui and Steve Wynn as one of the most influential people in Macau with Suncity responsible for more VIP rolling turnover than any other junket operator. WGM CEO Andrew W Scott explored all things gaming and much more in this rare and wide-ranging one on one interview.

Andrew W Scott: Hi Mr Chau, it’s a pleasure to speak with you and thanks for agreeing to such a wide ranging interview. Let’s start at the beginning. How and when was Suncity established?

Alvin Chau: Suncity was established in 2007. This was at the early stage of the liberalization of gaming licenses, when the gaming and tourism industry developed very quickly and opportunities were everywhere. The junket business has a long history in Macau. The liberalization of gaming licenses meant there were more possibilities and Suncity seized the opportunity to develop into the large-scale junket operator that it is today.

AWS: Can you tell us a little about the early years of Suncity?

AC: Suncity Group set up the very first Suncity VIP Club at Star World in 2007 and worked with the five-star hotels and resorts which belong to the six gaming concessionaires in Macau, mainly operating VIP Clubs and related services. In the beginning we only had a few tables, but now we’ve expanded to 20 VIP Clubs with 330 tables all over Macau.

AWS: How and when did you get involved?

AC: I started in the casino business in 1994. Ever since then I have held the same position I have now.

AWS: What would you describe as the biggest point of difference between Suncity and other similar businesses?

AC: Besides operating gaming and entertainment services, Suncity has always been committed to diversify its entertainment services and provide new entertainment, tourism and F&B experiences. This diversification embodies our vision of “diverse innovation and being proactive”. The scope of our business includes finance, real estate development, natural resource development, horse breeding, movie making, concerts and events planning, auctions, sports development, magazine publishing and online media, education, tourism, food and beverage and luxury goods. Suncity Group’s point of difference is that we focus on service. Besides the reception and services inside our VIP Clubs, we also provide customized services for our most significant clients. Our Group got its SGS international certificate of service on 3 July 2013 which is affirmation of our group’s distinguished service. We are the first VIP Club in Macau to obtain this certification.

AWS: Suncity has diversified into many different businesses: Sunluxe, Nextra, Sky21, Sun Child care centre kindergarten, E-Travellers Mag, Exmoo newspaper, financial and property companies and many more. Why has Suncity diversified so much?

AC: In order to tie in with Macau’s policy to promote economic diversification, I firmly believe as the leading industry, the gaming sector should drive other industries to develop together in a healthy manner. In these times of rapid change, businesses can’t adapt quickly if they adhere to their old habits. Only through change can businesses grow and step into the international arena. As illustrated by Suncity’s vision of “Innovative dreams bring a world of endless opportunities”, only by imagining and implementing boldly can the development of our Group move beyond the Macau gaming industry and find endless alternative development possibilities.

AWS: Is it more a branding exercise or genuinely an attempt to drive profits?

AC: It is indeed a branding exercise. I believed our brand was weak compared to our peers, so I wanted to build our brand image. So we expanded our brand into many businesses related to Macau’s service and tourism industries.

AWS: How do you decide which businesses Suncity gets involved in?

AC: It is determined by what our VIP clients are looking for, such as food and beverage, luxury goods, tourism and other things clients with such lifestyles come into contact with.

AWS: Sun Entertainment Culture Ltd runs concerts and events, develops stars and even produces movies. How and why was it established?

AC: Sun Entertainment Culture was established in early 2011, with the aim of bringing high quality entertainment and enjoyment to audiences creatively and with initiative. We are mainly involved in movie making and distribution, concert planning and the planning of promotional events. Not long after Sun Entertainment Culture was established, we were joined by the famous artist manager Paco Wong. With his guidance, we aim to build a large-scale entertainment network in Asia, to help eastern entertainment culture shine on the world stage.

AWS: What’s planned for the future for Sun Entertainment Culture?

AC: One of the core developments of Sun Entertainment Culture is star management and training. We have a very experienced star management team, providing comprehensive support, promotion and training for our company’s artists to guide the development of talented performing stars. In addition, our business includes commercial art design, exhibition planning and design, advertisement creation, securing sponsors, development of promotional products, a model agency business and more. We continue to promote talented filmmakers and actors and participate in the production of meaningful and quality films, thus contributing to the promotion of the Hong Kong film industry. At the same time, we will be devoted to holding large-scale concerts and other entertainment performances in Hong Kong, Macau and the Mainland and continue to launch different styles of performance to enhance the position of the company in the global market. I hope in the future we can drive the entertainment and performing business in Macau and movies we produce can be shown in Macau. We intend to use Macau as the background and theme of movies more and provide a chance for local Macau directors, singers and actors to develop.

AWS: Suncity has been expanding overseas rapidly. Can you tell us a little about Suncity’s operations outside Macau?

AC: As I mentioned earlier, Suncity Group is mainly about service, providing world-class VIP luxurious enjoyment and making sure that no matter where our guests go we can provide them with five star service around the world. We set up an overseas VIP Club in Melbourne, Australia and have set up overseas offices in Hong Kong and Taiwan. Our VIP services include the provision of overseas travel and visas arrangements, tailor-made international travel programs, air ticket and hotel reservations, ground transportation and shuttle services, overseas investment immigration planning and more.

AWS: What is your opinion of the potential for casino gaming in Japan?

AC: I think Japan has great potential. If Japan opens up gaming in the future, we would consider that market.

AWS: Macau has a huge shortage of labor and an unemployment rate that has remained steady at just 1.7 percent. What’s your opinion on importing labor to Macau and should Macau allow its casinos to have dealers from Mainland China?

AC: I think as Asia’s top international tourism city, sufficient labor is very important. Macau is faced with an issue of a shortage of human resources, so it’s very hard to raise the quality of our local labor. Personally I think if you want to improve the level of our local labor, we need to learn from overseas professionals to raise the standard of local labor and enhance the image of Macau as a diverse international tourism city.

AWS: Suncity is well known for running a very large and efficient fleet of vehicles, so the company understands transportation well. Macau has some terrible transportation issues – not enough taxis, cheating taxi drivers, crowded buses, crowded roads and more. It will only get worse in the coming years with increased visitation and the Hong Kong-Macau-Zhuhai Bridge coming too. Can anything be done to fix the problem?

AC: I think these are all related to the image of Macau as an international city. Solving the human resources issue might help to solve transportation issues perhaps by increasing taxi drivers and taxi numbers. At the moment the taxi industry is quite chaotic with issues such as taxi drivers taking only tourists rather than locals. I think we need to reflect on the situation, import more human resources and inject competition in order to enhance the taxi industry to improve Macau’s image as a tourist destination.

AWS: Some junkets focus on working directly with players, others (like Suncity) focus on extensive agent and sub-agent systems. Does having a large agent system give a greater reach across China? Why does Suncity focus on agents instead of marketing directly to players?

AC: Suncity’s business philosophy is to aim for continuous and sustainable long-term development, not quick short-term gains, and as a result we won’t approach players directly. We are mainly about managing partners and agents. We use a systematic business operations model designed to service thousands of customers, and that doesn’t involve targeting individual players.

AWS: Several junket operators have either listed or are talking about listing on the Hong Kong stock exchange and there has been discussion about Suncity doing that too. Listing obviously forces the junkets to be more open about their businesses. How do you feel about that?

AC: Our company’s listing plans can’t be disclosed yet. I think listing would serve to make our capital and financial situation more transparent. It would allow the public to know more about our situation, costs, profits and turnover. I know there are quite a few companies who have prepared for listing, but it seems they haven’t succeeded yet.

AWS: You have an excellent reputation amongst your staff. You’re universally known as “Wah Gor” (“brother Wah”) by Suncity staff from the most senior to the most junior and we’ve heard from many of your staff over the years that you’re a great boss in many ways. For example, the pay and benefits for working at Suncity are high, at the annual staff party there are some enormous cash prizes and even prizes such as cars are given away. Why do you go out of your way to provide so many benefits for your staff?

AC: As the slogan of our company indicates, we are people oriented. There are two groups of people we take care of – clients and staff. In order to provide quality service, every staff member is an important element. The most important thing in the service industry is to make customers feel delighted. Every staff member needs to smile and provide sincere service. Therefore staff need to be in a good mood at work so that feeling will flow through to the customers. So how do we make our employees happy? We organize trips for them to relax, we participate in charity activities with them, we communicate with them, listen to suggestions and improve their working conditions and benefits. In the long run, the employees will have a sense of belonging to the Group and peace of mind to work happily. Actually the salaries at Suncity are not high (laughs) but we give performance-based bonuses and rewards. This has had a great effect and is favored by our staff as well.

AWS: Given Macau’s low unemployment, how does Suncity recruit the best staff?

AC: Not many of our colleagues have high qualifications, but a lot of them have a very good mindset and attitude. I think being nice to the staff is the same as being nice to the company. Take our Sun Child care centre as an example. Many of our staff are new parents. In order to make them feel at ease at work we provide the best care and education for their children.

AWS: You and some young people with the same ideals set up the Macau Inspirational Youth Association. Can you tell us a little more about the youth association?

AC: Young people are the cornerstone of prosperity in Macau and the pillar of our future society. In order to maintain local economic advantage and diversified development, cultivating this young generation is an urgent task, so we set up the Inspirational Youth Association in 2011. The services are mainly focused in three categories: young people’s education, young people at work and community service. We set up scholarships to encourage students from less advantaged backgrounds, we organize professional lectures to provide quality training and learning opportunities for young people and assist talented Macau youths to develop their careers. We also aim to lift the internal and external virtues and develop the culture and creativity of young people in Macau and to broaden their horizons. We also encourage young people to actively participate in social affairs and voluntary work.

AWS: Suncity has a well-developed golf club where members can go on golfing trips around Asia. Can you tell us a little about the club?

AC: Suncity Group Golf Membership was formally established in November 2013. It is a non-profit organization mainly providing golfing-related activities. The aims are to continue the diversification of Suncity’s business, to strengthen the exchanges between shareholders and agents, to enhance the cohesion of the company, to promote overseas destinations and to help members source customers from overseas and extend their social networks. Members can make a reservation at designated golf courses around the world through their membership and accept local or overseas professional golf coaching. Members can also enjoy shopping discounts at designated merchants and access equipment maintenance and repair services.

AWS: What activities does the club have?

AC: Four years of membership includes a minimum of 20 golf competitions held overseas and domestically. The golf club regularly invites members to attend various luxury activities through Suncity Group such as concerts, movie premieres, luxury goods promotions and the cooperative promotion activities of Suncity Group and various casinos and hotels. Different types of stars and celebrities or famous golfers are also invited to participate. At the same time, the club attaches great importance to social responsibility so there will be an ongoing dedication to actively organize members to participate in various charity fundraising activities in the future.

AWS: How does someone become a member?

AC: Anyone can call the service line of the club on +853 6325 2020 or +86 159 2079 5992, or log on to the website of the club at www.suncity-golf.com to register online.

AWS: Some commentators – mainly from overseas and who perhaps don’t know the Macau market well – have predicted the demise of the junket model because of the rise of Premium Direct play and mass play. What’s your opinion on this? Will junkets need to change the way they operate as the Macau gaming market matures?

AC: To say junkets will disappear is an overstatement. The rise of premium direct and mass play at the concessionaire companies won’t cause the disappearance of the VIP Club business. I feel there are quite a few changes in domestic economic policies right now, and the gap between rich and poor is starting to narrow with the economy developing more evenly. I don’t believe the VIP business is only serving a small group. In fact, the method of success relies on large scale VIP operation.

AWS: You are a keen tennis player. How long have you been playing and where do you like to play?

AC: I go to those places that regular people go, such as Ocean Club. I’m not an expert at all and have only played for five years. Initially my interest in tennis started when my son was learning to play, so I went to learn tennis with him. The three major necessary elements of my daily life are working, drinking and exercise. I really enjoy doing exercise. I chose tennis because one can master the technique quickly, it takes less time to recover and I don’t feel too tired for the next day’s work.

AWS: No doubt you spend a lot of time on your business but when you are able, what are your favorite holiday destinations and why?

AC: I usually go to Southeast Asia and tropical areas for my holidays. Each time I go for about two to four days, as I won’t leave Macau for too long.

AWS: Either in your business or personal life do you have any regrets? If so, what is one or two of the major regrets?

AC: Basically no regrets. Every company decision can be right or wrong, but on the whole I believe we have done alright.

AWS: Either in your business or personal life, what’s the toughest decision you have ever had to make?

AC: The most difficult decision was to reform our company. Facing a very traditional business, how do we expand? Back then when business performance wasn’t so good and I planned to expand, there was lots of opposition including from colleagues and shareholders but I persisted. Back then we were the first among our peers to reform. We adopted many promotion methods, such as SMS promotion, border gate and taxi advertising and film production. This was also the first time film production was used as a channel to promote the company. More recently we’ve sponsored boxing fights, the Macau Grand Prix and other events.

AWS: Thank you so much for agreeing to speak with us, it has been a pleasure to talk with you.

AC: Thank you!