The business at Paradise City (pictured), a leisure complex with foreigner-only casino at Incheon, South Korea, is currently enjoying “positive” operating income and net income, with Japanese VIP business beating pre-pandemic levels, says Japan’s Sega Sammy Holdings Inc, a partner alongside local operator Paradise Co Ltd, in comments to GGRAsia.
Profit margins at the property “have improved further due to structural reforms under the pandemic period,” said a Sega Sammy Holdings spokesperson. “As such, it [Paradise City] has met our expectations,” added the person.
April 2024 will mark the seventh year since the Paradise City integrated resort (IR) opened. In three of those years, trading was affected by the Covid-19 pandemic, as was trading in all the other IRs and casino hotels in South Korea.
The Sega Sammy Holdings spokesperson noted that Paradise City, close to Incheon International Airport, “grew as expected and achieved profitability prior to the pandemic”.
The person added that currently, “the number of new Japanese VIPs” at the property “has grown to exceed pre-pandemic levels, and the average game play time in the casino is also increasing”.
The spokesperson stated that the Chinese VIP segment was “slowly recovering,” and that the firm expected that “gradual” process would continue.
“Room occupancy and daily rates remain high due to capturing domestic … demand … during the pandemic period, which entrenched the hotel’s position as a luxury resort, and we are expecting further growth in this area,” stated Sega Sammy Holdings’ representative.
The person added: “We will also continue to work on innovations not just for the management side of Paradise City, but the resort as a whole through the synergies that this South Korean-Japanese joint venture - which is the source of the business’ competitive advantage - makes possible.”
GGRAsia asked Sega Sammy Holdings whether opportunities might arise from an Incheon IR ‘cluster effect’ with the opening of Mohegan Inspire Entertainment Resort from the United States-based Mohegan Tribal Gaming Authority. The latter property is only expected to launch its foreigner-only casino later in this quarter.
Sega Sammy Holdings stated: “From the global market perspective, newcomers [create] additional demand, and we expect that it [Inspire’s launch can] grow the entire gaming market in the Seoul capital area, covering Yeongjong Island (Incheon) where Paradise City is located.”
The Sega Sammy Holdings spokesperson added: “Though Inspire is a competitor, it is also a partner in market co-creation and growth.”
GGRAsia also asked the group what opportunities might arise from a recently-announced memorandum of understanding that was signed to promote Incheon tourism generally.
“By improving the ‘Incheon city brand, composed by a blend of diverse content such as local tourism and K-Culture – K-Beauty, K-Food, K-Fashion – rather than individual facilities such as hotels and transportation, we expect it to become a destination that people want to visit for the whole experience it offers, and not just one or two aspects of it,” said Sega Sammy Holdings.
Its spokesperson added: “We will work to help Incheon grow into a ‘K-style’ tourism hub which is globally recognised and includes tourists, the local community, and the economy, rather than just the… tourism industry.”
Japan IR outlook
GGRAsia also quizzed Sega Sammy Holdings on what sales opportunities might be presented for its casino technology supply unit, Sega Sammy Creation Inc, by the nascent Japan IR sector. The MGM Osaka project – a venture between U.S.-based MGM Resorts International, local group Orix Corp, and some smaller investors – is due to be completed in 2030.
Sega Sammy Holdings stated: “It is hard to determine the role it might have as of now as specific regulations and licensing systems are not clear yet. However, we would consider entering the [equipment-supply] market if such a chance were to present itself.”
Asked if – in the event of a future round in Japan of IR applications – Sega Sammy Holdings saw opportunities to be part of a consortium for a potential IR development, the company told GGRAsia: “We are not currently looking to participate in any IR consortium, domestic or foreign. We are looking forward to the expansion of the gaming business… centred around… online, which is expected to grow further in the future.”
Sega Sammy Holdings had been interested to team with casino operator Genting Singapore Ltd in an effort to get a Yokohama licence, until that Japanese city withdrew from contention in autumn 2021.
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