Tensions with Taiwan affect Solaire revenues
MANILA, Philippines – Tensions between Taiwan and the Philippines have prevented Taiwanese VIPs from visitng Bloomberry Resorts Corp.'s casino project in Manila, affecting the company's gaming revenues.
“We had some VIP groups that were going to come but just cancelled because they couldn’t get out. The government wouldn’t let the Taiwanese travel to the Philippines. We lost some business because of the Taiwanese incident,” said Michael French, COO of Bloomberry's Solaire Resorts Manila.
Taiwan and Philippines are in a dispute over the shooting of a Taiwanese fisherman by Philippine Coast Guard members in May.
French said their revenues have been affected because their Taiwanese client base accounts for a chunk of the market.
He however do not see this to be a problem in the future if diplomatic issues are resolved.
French also said it had been difficult getting visas for Chinese VIPs.
“There was a general misconception. Manila didn’t have a great reputation with the South of China, but now that they’ve come to visit everybody’s quite happy,” said French.
“As long as nothing big happens everything should be fine going ahead,” he added.
Analysts have questioned the ability of new casinos such as Solaire to attract regional VIPs, citing the country’s poor infrastructure as possible deterrent. However, French said this has not posed a problem so far. “With the VIPs so far there hasn’t been an issue with the infrastructure. We meet them at the airport and take them straight in the car or they arrive in their private planes so it’s easy to pick them up from the hanger. Once the flyover is done in a few years, it won’t be a big deal at all,” said French.
“We also thought it would be a hard sell however, the international customers we’ve had are quite impressed with the quality of the property, the services standards, etc,” he added.
According to French, most of Solaire's revenues currently come from local players. “It’s a small number of foreign visitors but it’s a high amount of spend,” he said.
“But that will change over the years as we’re going slowly and deliberately building it up over the years. If our reputation continues to improve in the long term the foreign part will probably equal or become more than the locals,” he added.
Dennis Andreaci, Solaire's senior vice president for gaming operations, previously said Solaire expects about half of its revenues to come from "high-rollers," or those that spend as much as P50 million per visit. He added that it would probably take 6 months before Solaire becomes a viable option for gamblers in the region.
“We’re ramping up a little faster than we thought with some of the international business. We thought that it would be lower because we thought it would need more time to practice and get our operations together. We’re happy to say that in the first few weeks we’re happy with the quality of our operations to bring in international players so that’s been a good source of business for us,” said French.
Bloomberry chairman and port tycoon Enrique Razon said they’re seeing an average of 15,000-16,000 visitors per weekend day with peak time being between 10pm-12pm.
According to French, many of their sales personnel come from Macau so Solaire is able to benefit from good junket arrangements that can bring business to the casino. “So combined with the quality and team of people we have and the price of junkets, we’ve been able to grow faster,” said French.
Lorraine Koo, Solaire's vice president for business development and VIP services, estimated that 60% of Solaire's premium gaming business would be generated through intermediaries such as junket operators.
Another issue that might dampen the Philippine casino industry's prospects is the Bureau of Internal Revenue's (BIR) move to impose the 30% income tax on casinos.
However, this issue is currently under discussion as the 4 gaming licensees of Pagcor's Entertainment City -- Bloomberry, Andrew Tan’s Alliance Global, Japanese tycoon Kazuo Okada and Henry Sy’s Belle Corp. -- have issued an appeal to the BIR.
The $1.2-billion Solaire opened March 16. It is the first casino to open in Pagcor's Entertainment City. The venue has 300 gaming tables, 1,200 slot machines and 7 restaurants. - Rappler.com