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to provide year-round family entertainment. “Throughout the property, we will be able to showcase various cultural elements within all the amenities of the resort, including a museum and life sciences center. In addition, the concentration of the best retail, top restaurants, nightlife all connected to 5 and 6 star lodging product, will be a true differentiator as well.” Soper says 97 percent of the resort will be occupied by non-gaming facilities. “Our business model contemplates that Inspire will generate more non-gaming revenue than gaming revenue which is quite unusual for most gaming resorts outside of Las Vegas.” Medical Lift? The resort will contain 1,350 hotel rooms in a 6-Star and 5-Star hotel complex and spa; nearly 200,000 sq. ft. of convention and meeting space; more than 300,000 sq. ft. of retail dining and nightlife options, as well as historical centers that pay tribute to

the Native American and Korean culture. The resort will also contain health, wellness and beauty medical facilities that will provide body enhancement options. South Korea is viewed as the epicenter of the plastic surgery market, with more surgeries per capita than anywhere else and a booming trade in medical tourism. In terms of the gaming offering, Inspire’s foreigners-only casino will feature 250 table games and up to 1,500 slot machines. It will also have private Air Terminal access at the adjacent Incheon Airport to service high rollers. However, the resort will be targeted primarily at the mass and premium mass sectors of the market. Revenue at South Korea’s existing foreigneronly resorts is recovering after being hit hard by a drop in tourism numbers in 2015, triggered by an outbreak of Middle Eastern Respiratory Syndrome. In the nine months to end-September, Paradise Co. reported total sales rose 10.4 percent, while Grand Korea Leisure, which operates casinos under the Seven Luck brand, saw Q2 sales gain 5.4 percent. The results compare with a 5.9 percent gain in sales for Kangwon Land, the only operator with a license permitting locals to gamble. Kangwon however is comparing with a higher base, as its revenues proved resilient during the visitor downturn.

from our site. The Seoul capital area is the world’s third largest urban area. In light of the population density with powerful demographic characteristics, the under-supply of entertainment and leisure product makes this a remarkable non-gaming opportunity.” “The Korean government awarded an IR license based upon a vision of driving tourism and creating jobs, and I know our Tribe is highly sensitive in ensuring we help them to achieve these goals,” Soper said.

Underserved market

Iao Kun says Jeju Sun deal lapsed

Soper says he is “absolutely” convinced Inspire will be able to thrive, even without a locals gaming license. “As the closest gaming jurisdiction to Northern China, including the cities of Shanghai and Beijing, there are over 700 million Chinese residents within a two hour flight to Seoul,” he said. “In fact, Korea is the closest gaming jurisdiction to most of these residents relative to any other gaming jurisdiction. Three of the four largest MSA’s in the world are only 2 ½ hours away, and Seoul has been, and continues to be, the most popular destination in the world for Chinese tourists.” He also says there is a significant opportunity to tap into the Seoul market to generate non-gaming returns. “The reality is that Korea, one of the world’s top 10 economies, is an underserved leisure destination for North Asia, including Korea itself. There are over 50 million residents in Korea, and almost half live in the Seoul Capital Area which is only a subway ride

FOREIGNER-ONLY REVENUE Y15

$1.13b

Y16E

$1.15b

Y17E Y18E

$1.21b $1.33b (Source: Morgan Stanley)

Paradise Q3 sales Grand Korea Leisure Q2 Kangwon Land Q2

+22.7%

+5.4%

+5.9%

Macau VIP promoter Iao Kun Group Holdings says an accord to buy the Jeju Sun Hotel & Casino in South Korea from Bloomberry Resorts has expired. Iao Kun agreed to buy the resort in June from Bloomberry Resorts in a transaction worth KRW 117.5 billion ($102.3 million). In agreeing to the sale, Bloomberry said Iao Kun was confident it would be able to attract China VIPs to the island.

Kangwon Land mulls cooling off period for locals Kangwon Land is considering imposing tougher measures to prevent problem gambling, including a cooling off period of up to three months for those suspected of problem gambling. At present, locals are allowed to gamble for up to 15 days a month. Under the new proposals, those who gamble 30 days over two months will be banned for a month for the first violation. If they repeat the frequency they will receive a two-month ban and on the third time will get a three-month penalty.

Asia Gaming Briefings | November 2016


AGBriefings November 2016