Increased scrutiny on Macau’s operations and the crackdown on its junkets are actually gains for other regional operators, say executives from INSPIRE Entertainment Resort and Hoiana Resort and Golf.
Both resorts are targeting a higher-end clientele, not being reliant on the mass-market strategy that Macau is now pursuing, meaning that the VIP players who may be reticent to play in Macau now have better regional options, with luxury venues set up to cater to both their gaming and luxury needs.
One such potential winner is Mohegan’s first non-American project, INSPIRE, set to open its first phase in October of this year. The $2 billion first phase of the project includes a foreigner-only casino, a 15,000-seat arena, convention space, dining, retail and entertainment, alongside an indoor water park and outside family park.
Conveniently located just minutes from the Incheon International Airport, in South Korea, the IR is also just an hour away from Seoul. While its license won’t allow for local play, the group’s COO, Chen Si, notes that players who formerly frequented Macau won’t be its core focus – noting that a large group of foreign passport holders are already living in South Korea, with the majority in the Seoul area. Half of these are Chinese nationals, notes the COO, mentioning that “obviously the propensity for gaming is very high”.
While China did exclude both South Korea and Australia from its list of outbound tour group travel authorization recently, the COO notes that this isn’t expected to have a large impact on the group’s bottom line, as it’s targeting the higher-income segment over the mass travel which Macau is now luring.
And while geopolitical factors are still an issue, after South Korea and China engaged in a tit-for-tat pandemic restriction measure spat, the focus on other regional players means it doesn’t keep all of its eggs in the China basket.
Also speaking at the Wednesday conference session, Gillian Murphy, Executive Vice President of Hoiana Resort & Golf, noted that the group’s initial $1.2 billion segment of its massive 1,000-hectare property is focusing on similar players as INSPIRE.
Both operators are leveraging their luxury offerings to create experiences beyond the gaming floor, with Hoiana having the benefit of opening earlier, in June of 2019, with the VP noting that “we’ve got some traction ahead of the game”. While the pandemic did put a damper on its ramp-up, Vietnam’s flexibility in allowing the operator to remain open was highly beneficial, noted the EVP, also helping it to maintain operations even as its main partner, Macau-based junket operator Suncity, underwent massive structural changes, resulting in its rebranding as the LET Group and total structural changes in management.
While the restructuring is still ongoing, with Murphy noting “quite candidly, the business entity is going through some changes right now,” the restructuring is proving positive for the group and the EVP notes investors and punters should “watch the changes”.
The property is aiming to further the synergy between its 140 gaming tables, half of which are located on the mass floor and half divided between private rooms, its electronic gaming machines, and its pristine golf course.
“Now we need to compliment it with more of our facilities open and get more traction into our premium area,” Murphy told attendees.
The group’s plans for this year also “precluded China”, notes Murphy, with Hoiana focusing on “predominantly six markets”, with Korean players being the largest block of punters.
“Right now our constraint is the airlines,” notes the EVP, pointing out that “we’re at 38 percent in terms of inbound travel”, with hopes that increased flight frequency will drive up visitation.
Due to restrictions to local Vietnamese gambling, Gillian Murphy said that the initial target of the casino will also be foreign passport holders in the region.
Hoiana still has over 90 percent of its 1,000 hectares open for development, with massive plans for residential and commercial areas, more golf courses and hotel rooms and other developments, expanding on the 90 hectares which house the first phase of the project.