Paradise, Lotte Tour Development, and GKL
Second Quarter Rebound Expected Thanks to May Holiday Surge
Visa-Free Entry for Chinese Group Tourists to Begin in Third Quarter
Anticipated Boost from Increase in Mass and VIP Customers
Major foreigner-only casinos in South Korea are forecasting strong results for the second quarter of this year. This is due to an increase in visitors from key countries such as Japan and China during May, which included a string of public holidays. The continued appreciation of the Japanese yen has led to higher betting amounts from Japanese tourists, and the upcoming visa-free policy for Chinese group tourists is also expected to further boost performance.
According to industry sources on July 3, Paradise, which operates foreigner-only casinos at four locations?Walkerhill, Jeju, Busan, and Incheon Paradise City?reported that its casino revenue last month reached 82 billion won, a 41% increase compared to the same period last year. Sales in May, which coincided with Japan’s Golden Week and China’s Labor Day, rose by 10.3% year-on-year, marking the second consecutive month with revenues exceeding 80 billion won.
From April to June, Japanese VIPs?Paradise’s main customer base?drove the rebound in performance. During this period, 21,536 Japanese VIPs visited Paradise casinos, over 1,000 more than the 20,477 recorded during the same period last year. Their drop amount (the total amount paid by casino customers to purchase chips) reached 787 billion won, up 11.8%. The number of Chinese visitors is also on the rise. Over the three months, 9,946 Chinese VIPs visited, about 900 more than the 9,093 in the same period last year. After two consecutive months of decline, the drop amount for Chinese VIPs in June increased by 19.8% year-on-year to 106.1 billion won.
Jeju Dream Tower Complex Resort, operated by Lotte Tour Development, also posted net casino sales of 110.04 billion won in the second quarter (Dream Tower Casino division). This represents a 65.4% increase compared to the same period last year. Net sales, which exclude agent commissions and other fees from total revenue, surpassed 100 billion won in a quarter for the first time since the casino opened in June 2021.
Dream Tower Casino set a new monthly record for casino visitors in May with 51,207 guests, and broke that record again in June with 51,515 visitors. Considering that 80% of foreign guests who stayed at the Grand Hyatt within Jeju Dream Tower Complex Resort last month were Chinese nationals, it is estimated that a significant portion of casino visitors were also from China or other Chinese-speaking regions. Jeju Island is currently the only region in South Korea that allows visa-free entry for Chinese nationals.
Grand Korea Leisure (GKL), which operates Seven Luck Casino in Gangnam and Yongsan in Seoul and in Busan, is also expected to see a rebound in performance. In May, 6,701 Japanese visitors participated in casino games, an increase of about 1,900 compared to 4,786 in the same period last year, while the number of Chinese visitors rose by about 400 to 5,680. Seven Luck Casino’s revenue for the month was 30.6 billion won, up 4% year-on-year. Given the trends in visitor numbers and revenue at competing casinos, it is expected that last month's performance was even stronger.
These foreigner-only casinos are considered prime beneficiaries of the government’s visa-free policy for Chinese group tourists, which is scheduled to take effect in the third quarter. Reflecting these expectations, the share prices of Paradise, GKL, and Lotte Tour Development on the Korea Exchange closed 42%, 45.8%, and 113.2% higher, respectively, compared to three months ago.
An industry official stated, "If the visa-free policy for Chinese group tourists is expanded, the proportion of premium mass customers (a segment between general customers and VIPs) could increase, centered around mass (general) customers who can visit casinos without significant burden. This is expected to expand the overall size of the foreigner-only casino market in South Korea and further increase VIP inflow."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
