Paradise and GKL January-February Sales Surge YoY
Recover or Exceed 2019 Levels
Increase in Japanese VIP Drop Amount...Effect of New Venue Openings
Paradise and Grand Korea Leisure (GKL), representing foreigner-only casinos, have finally caught a 'spring breeze' after the COVID-19 pandemic. Casino sales in January and February this year have recovered to or exceeded pre-pandemic levels. This is the result of eased quarantine measures, the influx of foreign tourists from Japan and Southeast Asia, and the effects of opening new business locations. With the addition of the previously sluggish Chinese inbound demand (foreign tourists visiting Korea), it is expected that quarterly performance will show an upward trend this year.
According to the casino industry on the 7th, Paradise's consolidated casino sales for January and February this year amounted to 92.799 billion KRW, a 164% increase compared to the same period last year. This figure combines the casino performances of the four locations operated by Paradise: Walkerhill, Jeju, Busan, and Incheon Paradise City. Compared to the 111.459 billion KRW casino sales recorded in the same period in 2019, before the COVID-19 outbreak, it has recovered to about 83% of that level.
GKL's casino sales for January and February this year reached 68.858 billion KRW, surpassing the 66.535 billion KRW recorded in the same period of 2019. This represents a 315.7% growth compared to the same period last year. The drop amount (the amount customers pay to purchase chips) also rose significantly, with the two-month cumulative amount this year reaching 482 billion KRW, recovering to 65% of the 2019 level. During the same period, Paradise's drop amount rose to 838.9 billion KRW, reaching 83% of the pre-pandemic level.
In the securities industry, the increase in sales for both companies at the beginning of this year is attributed to the rise in drop amounts from Japanese visitors. It is also analyzed that GKL's relocation of its Gangbuk business location to the Yongsan Dragon City branch in Seoul as of December 31 last year had a significant impact.
Paradise's Japanese VIP drop amount in the fourth quarter of last year was 655.8 billion KRW, a 116% increase compared to before COVID-19, and among the 476.4 billion KRW drop amount in January this year, the Japanese VIP drop amount alone recorded 233.9 billion KRW, surpassing the average monthly level of 2019.
GKL's Japanese VIP drop amount for January and February this year was 146.3 billion KRW, nearly 70% of the 224.1 billion KRW recorded in the fourth quarter of last year. Including March's drop amount, it is highly likely that the first quarter of this year will exceed that figure.
Among the three business locations operated by GKL in Seoul Gangnam, Yongsan, and Busan, the Dragon City branch seems to have settled in just two months after opening. The drop amount for January and February reached 141 billion KRW, approaching the 174.8 billion KRW drop amount recorded over three months in the Gangbuk business location in the fourth quarter of last year. The new casino location has a 20% larger exclusive area compared to the existing business location, and the number of gaming tables increased from 50 to 55. As a result, as of January, the drop amount and sales at the Seoul Dragon City branch were 93.3 billion KRW and 14.9 billion KRW respectively, achieving the highest monthly performance of the Gangbuk business location since COVID-19.
The travel industry expects that Chinese tourist arrivals will fully resume starting from the first half of this year. China is considered a major 'big spender' in the casino industry, so companies involved in related businesses can expect a rebound in performance. Ji In-hae, a researcher at Shinhan Investment Corp., analyzed, "If China reopens, foreigner-only casinos will undoubtedly benefit. Even if Chinese demand recovers to just the 2019 level, it will have the effect of increasing the overall customer proportion by 20%."
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