Cirque says Macau ZAIA here to stay

Jerry Nadal (senior vice-president for resident shows of Cirque du Soleil): ‘We’re here for the long hall’ as reported April 7, 2010 in the Macau Daily Times. Full article posted here with link to original MDT article at end of post.

I’ll just add a little background here to start. Cirque Du Soleil has two permanent shows in Asia – ZED in Tokyo, Japan (Disneyland) and ZAIA in Macau, China. I am a keyboardist and assistant bandleader for the ZAIA show. The artists and technicians of ZAIA came to Macau for Cirque to bring Las Vegas style entertainment to Macau – the “Las Vegas of China”. In the past the Chinese don’t go to see shows, they just come to gamble and it’s serious business. So spearheading the first large show in China was taking a big chance – the work was definitely cut out and a hard road.

Then the global recession hit in late 2008 just weeks after the grand opening of the Macau ZAIA show. The Venetian Macau (largest casino in the world at opening) owned by the Sands in Vegas was upside down in it’s finances and with the hit of the recession was on the verge of bankruptcy. Stocks went from a high of $150 per share down to a low under $2 (two dollars).

At the same time Macau kicked a lot of expats out of the country, lots of people lost jobs. The Venetian stopped construction and laid off some 12,000 construction workers and employees. Everyone was freaking out. The ZAIA show opened with an expectation to lose money for a few years – but with the Sands and Macau in such financial trouble it was an easy and viable target for the chopping block.

In mid 2009 the second big casino of the Cotai Strip opened – City of Dreams. And in 2010 City of Dreams will open a show by Franco Dragone, producer of many Cirque shows and a competitor to Cirque. Some people were like “Oh no, there’s not enough of an audience for one big show, now we have two?”

But if you look at the long term vision of Macau it looks very good. The continual game of the government cutting back mainland China visas to Macau is just part of them throttling Macau’s growth to make sure everything’s in check and doesn’t get out of hand. The main casino properties are still developing their offerings to encourage families to bring children; the big shows are starting to open here and will mature to grand art in Vegas style; and the more properties that open, the more offerings available. We only have 2 properties open now – City of Dreams and Venetian – and even those are still under construction and development – they are incomplete. In time there will be 20 developed properties on this Cotai Strip.

It’s been really incredible to see the growth in Macau just over the two years I’ve lived here. And it’s mind blowing when you try to step into Sheldon Adelson’s vision of what the Cotai Strip can be at completion. A true Vegas destination. And Macau already brings in a higher gross than Vegas (as of 2008 I think).

So where’s it all sit now? Well as artists, we just like to perform. We’re excited to have Dragone in town because to us artists they are like family – fellow circus performers. And we’re happy that the big whigs have been able to sort out their differences of vision so that we can all focus on our shows and continually improve and perfect our performances.

Ok – on with the article from the Macau Daily Times.

MACAU DAILY TIMES – INTERVIEW WITH JERRY NADAL

07/04/2010 01:30:00 Luciana Leitão – MACAU (SAR) CHINA

ZAIA is here to stay, at least for eight more years. No conversation was held between Cirque du Soleil and Venetian about terminating the show before the end of the ten-year contract. That is what the senior vice-president for resident shows of Cirque du Soleil, Jerry Nadal, assured in an exclusive interview to Macau Daily Times. Although he admits the show’s occupancy results are far from what were initially expected, he claims that improvements are being made and that numbers are rising everyday. As for the recent news that referred to the end of the show within a short-term period, he says they’re just rumours.

MDTimes – How long will ZAIA continue to show at the Venetian Macau?
Jerry Nadal – We have a ten-year contract with the Venetian. Last year was a rough year for the Venetian, as it was for companies worldwide. I guess they were looking at their costs, we worked with them looking at the overall costs of the show. I know there have been a lot of rumours about whether we’re staying with it. We’ve never had that conversation with the Venetian and I was just there recently talking about the show, how we’re doing and how we are picking up business. So, for us, we’re here for the long hall.

Within another year and a half, we’ll be up to the occupancy numbers that we anticipated having.

MDT – So, we can presume the recent news was wrong…
J.N. – We have a ten-year contract and we opened in July 2008. We’re on our second anniversary this July. As far as we’re concerned, we have eight more years to run on our contract with the Venetian.

MDT – Recently, the CEO of Sands Macau, Sheldon Adelson, complained about ZAIA’s occupancy numbers. If he is doing this publicly, won’t this have any impact in the show?
J.N. – We’ve spoken to Sheldon. I love Sheldon, I think he is very colourful and a great businessman. Yes, he would like to see better occupancy numbers for ZAIA, but we have to look at what was going on in Macau as a whole. When the Venetian was designed and built, it really was with the convention business in mind and the MICE traffic. That really hasn’t materialized yet in Macau, for a whole host of reasons, most of which has to do with the number of available rooms overall to handle the big conventions. So, we geared a lot of our sales and marketing efforts towards a segment that didn’t actually materialize. We were disappointed with the sales as well. We put a whole team in place in 2009 to help the marketing team and the Venetian supplement the sales. We have a group of eight people at our office concentrated to go into southern China, into mainland China and we’ve established over 200 relationships with tour operators to build business.

Because there is primarily a lot of Mainland Chinese getting in, although the bulk of our customers come from Hong Kong, Taiwan, Japan, we’re trying to cultivate a Mainland Chinese audience. We’ve had success with that, so we’re watching our numbers come up. It’s been a long process. We also told the Venetian, when we first started, that, in our estimation, looking at the market place, with the absence of large scale entertainment like ZAIA, it was going to take around three years to really build the market and establish the show. We’re one year and a half into that process.

MDT – Could Adelson’s public statement be a sign that he intends to axe the show?

J.N. – No, because we’ve had subsequent conversations with Steve Jacobs and the people that run the Venetian in Macau about our sales efforts, their sales efforts, the changes we propose making to the show, where we see the show going this year and next year, and where they envision their audience coming from. Particularly now that they are starting the construction of other parcels across the street, we’ve had a very broad discussion about the show and they remain very firmly committed that entertainment needs to be an anchor point for the whole resort field of the show, it needs to be one of the elements firmly emplaced in the property. It cannot just be about gaming.

But we’re not in the rumour business. We try not to answer all the rumours that come out, because it becomes nonstop. That’s why we don’t like to talk about that.
Zaia is the right show for Macau

MDT – At this point, how much of your audience comes from the Mainland?
J.N. – I would say probably 25 to 30 percent of the audience is coming from the Mainland.

MDT – How about Macau public?
J.N. – I think Macau residents come here always. It’s not that big a population, but we’ve had tremendous amount of support not only from the people that work in the Venetian, but from the local population as well.

MDT – Recent news also claimed Macau public was not very supportive of ZAIA.
J.N. – I don’t agree with that, because we’ve done surveys after our shows and we’ve received a very high satisfaction rating from everybody that has seen the show, including Macau residents.

MDT – Why have the ticket sales been so disappointing?
J.N. – The convention business that the Venetian team was anticipating to materialise did not. So, the occupancy wasn’t there in the hotel and as a result, it wasn’t there in the showroom. I also think it’s an education process. We told the Venetian that getting people in to see a show for 90 minutes, where the culture in Macau has really been gaming and gaming related, it’s like Las Vegas was, perhaps, 50 years ago. From our viewpoint, it will be the evolution of the market as more properties open and with City of Dreams opening across the street (they’re going to have a large show in the coming month). It is part of the evolution of entertainment of Macau, because the more international tourists come in, the longer people stay (not just day trippers) and, within another year and a half, we’ll be up to the occupancy numbers that we anticipated having.

MDT – Since the results have been less than expected, do you think Cirque du Soleil needs a different product from ZAIA to succeed in Macau?
J.N. – ZAIA is the right show for Macau. Now, when we thought of it, the show was going to be attracting primarily international clientele because of the convention business. That’s why we did a show that was very similar to what we would have done, for instance, in Las Vegas or Tokyo. But now that we have a pretty good mix of Mainland Chinese coming in, given the level of acrobatics that is available in China, all of our shows are a work in progress. They evolve over time, so if you saw “Mystère” – which has been running for 16 years in Las Vegas – when it opened in 1993, it was a very different show than what it is today. So, we’re looking at how we can change some acts to get more Chinese appeal to the show and upgrading some of the acts. That’s part of our on going process – we’re looking at how everything works, what we can improve to make it a little bit better. But we have no intention of changing the show.

So, we’re looking at how we can change some acts to get more Chinese appeal to the show and upgrading some of the acts

MDT – Why do you think these rumours – as you call it – started?
J.N. – Last year, there was also rumours that the Venetian was going bankrupt and it was a very difficult year. It was difficult in Las Vegas, difficult in Macau. There were rumours in the papers that the Venetian was on the verge of bankruptcy. Our other partners here in Vegas were rumoured that they were on the verge of bankruptcy. Those two partners had very difficult times financially, but they have weathered the storm, they’re on going. People started talking that their jobs were being cut and things were not performing as well as anticipated and some rumours started. But we’re not in the rumour business. We try not to answer all the rumours that come out, because it becomes nonstop. That’s why we don’t like to talk about that.

MDT – Does this ten-year contract mean that ZAIA has to run for ten years or can Cirque du Soleil change the show?
J.N. – It’s specifically for ZAIA. That was the whole intention of the contract, because when you put up a show that is that big and that complex, it takes a long time to create and then to produce. It needs to run a long time in order to return profitability.

We had conversations with Venetian recently about their other properties that they are building and some possible ideas for additional entertainment in Macau, not just Zaia, but in addition to Zaia

MDT – Has there been any conversations about another show, from Cirque du Soleil, after ZAIA?
J.N. – Actually, we had conversations with the Venetian recently about their other properties that they are building and some possible ideas for additional entertainment in Macau, not just ZAIA, but in addition to ZAIA. It was always our original conversation with them before the bump of 2009.

MDT – Is there a date for this additional show?
J.N. – No, but it would be after those properties are finished across the street.

MDT – What kind of show are we talking about?
J.N. – It’s an early discussion. We obviously have a certain reputation. We have a lot of products and shows that we produce. So, we’re in conversation about what we think could help them with their entertainment and overall resort offerings.

Macau Daily Times Online Article
http://www.macaudailytimes.com.mo/interview/10862-Jerry-Nadal-senior-vice-president-for-resident-shows-Cirque-Soleil-Were-here-for-the-long-hall.html