The Okada Manila casino resort (pictured) in the Philippine capital is likely in 2018 to make an outsize contribution to private-sector casino gross gaming revenue (GGR) in Manila and take market share from the three established private-sector gaming resorts there, says a report from investment bank Morgan Stanley Asia Ltd.
“Mass revenue growth has strong correlation with hotel room supply growth,” stated analysts Alex Poon and Praveen Choudhary in a Thursday report.
“The opening of Okada Tower A in first quarter 2018… could accelerate [market] growth in 2018,” they noted, referring to a property developed by a unit of Japan’s Universal Entertainment Corp that had a soft launch in December 2016 but has since been progressively opening additional facilities. The first hotel tower is due to have circa 500 rooms when fully opened – some rooms are already available – with a similar number added by 2019, said the bank.
Morgan Stanley also stated that Resorts World Manila – a property controlled by Genting Hong Kong Ltd and local conglomerate Alliance Global Group Inc – was also due to add hotel capacity in the second half 2018, via a third phase.
The institution expects casino GGR for all four private-sector Manila gaming resorts – including Solaire Resort and Casino, promoted by Bloomberry Resorts Corp, and City of Dreams Manila, operated by a unit of Melco Resorts and Entertainment Ltd – to expand by 32 percent in 2018. But the growth for the so-called integrated resort sector without the relative newcomer Okada Manila was likely to be 14 percent, stated the bank.
“We expect the rebound in regional VIP strength in 2017, overseas expansion by Macau junkets, and video streaming to continue to drive strong growth in the Philippines,” said the analysts, referring latterly to a form of remote online gaming featuring live video streaming of casino table games said to be particularly popular among some Chinese customers according to industry commentators.
“We forecast VIP [GGR] growth of 36 percent in 2018 (2017: 24 percent) with existing casinos (excluding Okada Manila) growing at 13 percent (2017: 15 percent),” wrote Mr Poon and Mr Choudhary.
“Since VIP revenue in the Philippines of US$1.0 billion in 2017 is small compared to regional peers like Macau (US$16 billion) and Singapore (US$2 billion), we see huge future upside,” they added.
The institution said mass GGR growth year-on-year in the Manila integrated resort sector was likely to be 29 percent, positively influenced by Okada Manila.
The bank expected Okada Manila’s share of Manila integrated resort GGR to rise from 10 percent to 22 percent in 2018, while it thinks Resorts World Manila’s will slip from 15 percent to 13 percent; that of Solaire from 41 percent to 36 percent, and that of City of Dreams Manila from 34 percent to 29 percent.
Morgan Stanley stated regarding increased capacity in 2018 at Resorts World Manila: “Phase 3 expansion, which adds 900 rooms to the existing 1,400 rooms, may not drive significant EBITDA [earnings before interest, taxation, depreciation and amortisation] upside in 2018 in our view due to GGR market share shift towards Entertainment City.” The Resorts World Manila property is some distance from the others, in a zone known as Newport City near Manila International Airport.
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”We do not believe that reopening the advance notice nomination deadline [for board directors] is appropriate or justified”
Daniel Boone Wayson
Chairman of the Wynn Resorts board of directors