Written by Andrea De Grazia
Philippines Government announcement several plans to boost the country’s infrastructure to reduce poverty among the population. The country has been recently experiencing economic growth of more than seven percent. However, Philippines remain one of the least developed countries among ASEAN.
The Philippines economic growth is now pushing for enhancements in the infrastructure being an important aspect to many industries including tourism. The country’s aspire to become the first in ASEAN’s gaming industry as Manila hopes the four-casino cluster will enable it to overcome Singapore as the world’s second-largest gaming destination after Macau.
Its first project is represented by Solaire Resort and Casino opened in March 2013 being the first of four planned at the cost of USD 1.2 billion; integrating resorts in the Entertainment City on Manila Bay. However, the project is yet to meet expectations. Results for 2013 Solaire’s parent company Bloomberry Resorts has not been positive as Bloomberry reported a loss for the year equivalent to USD 29 million. Strictly regarding Solaire’s nine and a half months of operations the loss amounted to USD 6 million. Yearly gross gaming revenue have also been disappointing, being USD 333 million, equivalent to three weeks’ revenue at Venetian Macao. However, the fourth quarter has been slightly more positive at USD 125 million for Resorts World Manila.
Resorts World Manila, which opened in 2009 as the Philippines first integrated resort, has increased country’s gaming market share. However, its operating profit fell by 38.1%. While, net revenues continued to see an increase of 5% to USD 690 million; as a consequence of a boost in the gaming revenue by 6.9%. Regarding the competition between two resorts; the promotional allowance for Resorts World Manila rose by more than 50% to USD 57 million against Solaire. Previously, Solaire had spent USD 76 million in promotions against USD 18.9 spent by Resorts World Manila. The promotion factor suggests the Philippines’ market might be approaching its saturation point.
The government owned Pagcor reported their revenue from its 12 casinos and mini-casinos, throughout different areas in the Philippines to a have dropped by 8.9%. In fact one of its casinos has been closed in 2013 and there are plans to close another one next month. As a consequence, some doubts have arisen about the possibility and feasibility of expanding the integrated resorts business in the Philippines.
The country has several attractive islands destinations but the capital Manila has still few attractions. In fact, Solaire has increasingly being able to bring a new level of elegance to the gaming sector but further investments are needed in order to boost the tourism.
Melco declared its willingness to expand in the Philippines because of the country’s popularity as an entertainment destination and because of its strategically close position to major tourism leaders in the region; such as South Korea, Taiwan, Japan and China. The anticipated growth in leisure and tourism industry in the Philippines will be boosted by ASEAN tourists continuing to seek new travel destinations and experiences.
Melco Crown’s enormous City of Dreams Manila project in the Philippines is schedule to open in mid-2014. The project aims to become the second of four integrated resorts and casinos to open in the Philippines’ Entertainment City.
–Edited by Mohamed P.Hassan