Recent overseas marketing campaigns by foreigner-only casinos based in South Korea are likely to support revenue recovery at those businesses. That is according to a note from Seoul-based brokerage Shinhan Investment Corp.
“We believe overseas marketing campaigns will help to drive further improvement in earnings for foreigner-only casinos going forward,” wrote analyst Ji InHae, in a report published on Wednesday.
She added: “Kangwon Land [casino], which is open to locals, is likely seeing an uptrend in daily sales since the restriction on side bets and cap on visitors were removed on May 16.”
Ms Ji stated that foreign-only casino operators Paradise Co Ltd and Grand Korea Leisure Co Ltd had been “dispatching marketers overseas since late April and early May, as part of efforts to attract existing customers and new visitors” to travel to those firms’ respective properties. That was possible as South Korea was moving toward normalisation of international flights and complete removal of social-distancing rules related to COVID-19.
Even unvaccinated travellers to South Korea are now exempted from any quarantine, provided they twice test ‘negative’ for Covid-19 within three days of arrival.
All but one of South Korea’s 17 casino venues are open only to foreign players. In 2021, when restrictions on inbound travel by foreigners were tighter, the 13 percent year-on-year growth in casino-sector gaming revenue was driven by Kangwon Land, the only property open to locals.
Ms Ji said that overseas marketing efforts were “starting to drive gradual improvement” in foreigner-only casino operations. “From the second half, we expect to see faster recovery in the inflow of Japanese visitors, the main customer base for foreigner-only casinos,” she added.
The analyst stated that both Paradise Co and Grand Korea Leisure reported “significant improvement in monthly earnings for May”. The two firms reported a combined table drop of KRW293.1 billion (US$231.07 million) in May, up 19 percent in year-on-year terms.
“We also note continuing improvement in key indicators (increase in visitor numbers, rise in table drop, recovery in hold percentage, growth in sales),” Ms Ji said. “At Grand Korea Leisure, VIP and mass visitors visibly increased from previous stagnant levels, leading to an increase in table drop and steadier hold percentage, and resulting in sales growth.”
The Shinhan Investment analyst however noted that despite “expectations for rapid recovery and resumption of dividend payments”, stocks of casino operators in South Korea “have yet to see their market caps return to 2019 levels”.
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