Paradise Co Ltd forecasts its newest casino resort in South Korea – Paradise City, which opened on Thursday – will receive about 1.5 million visitors in 2017.
The information – quoted by South Korea’s Yonhap news agency – was provided in a media briefing on Thursday.
According to some investment analysts, the South Korean market for inbound tourism is currently facing headwinds due to a political row between that country and China over the siting on South Korean soil of a U.S.-supplied missile system – known as Terminal High Altitude Area Defense (THAAD) – designed to counter North Korea’s ballistic missile programme.
Reuters news agency said in a Tuesday report that the number of Chinese visitors to South Korea fell 39 percent year-on-year in March. The Korea Tourism Organization had previously announced that – respectively in January and February – the tally of such visitors had risen by 8 percent from a year earlier.
“Tensions over THAAD will not be eased in the short term,” Paradise Co’s chairman and chief executive, Chun Phil-Lip, said during Thursday’s briefing on the new resort, as quoted by the Nikkei Asian Review. “We are approaching this matter with a conservative perspective.”
Mr Chun said: “We have been heavily relying on China but we will [develop] new markets.” He added: “Now we keep our eyes on Japan and Southeast Asian countries, such as Vietnam, Thailand, Indonesia, Malaysia and Hong Kong.”
In 2016, South Korea received just over 17.2 million overseas visitors, with nearly 47 percent of the tally – or over 8 million arrivals – generated by China, according to figures published by the Korea Tourism Organization.
The Paradise Co management expects Paradise City (pictured in an artist’s rendering) to help boost the firm’s performance: the company is forecasting a 26.6 percent year-on-year jump in revenue for full 2017 to KRW880 billion (US$773.8 million).
The Paradise City casino resort is located at Incheon and includes a gaming facility open only to foreigners. The property is located close to Incheon International Airport, which serves as the main air hub for the country’s capital Seoul.
The initial phase of Paradise City – launched on Thursday – consists of a casino, a hotel and a conference-cum-banquet facility. The project is being developed by South Korea’s Paradise Co – an operator of foreigner-only casinos in that country – and Tokyo-based Japanese pachinko operator Sega Sammy Holdings Inc.
A second phase – to open in the first half of 2018 – will add further entertainment and leisure offerings to the complex, and a boutique hotel.
The total investment amount for the 330,000-square-metre (3.58 million-sq-foot) site stands at around KRW1.3 trillion, according to the promoters.
Paradise Co now operates six foreigner-only casinos in South Korea, including another existing property at Incheon. The country has now 18 casinos but only one – Kangwon Land in a remote upland area – is allowed to serve South Korean nationals.
Two additional large-scale gaming resorts have been announced for Incheon. The Inspire Integrated Resort scheme, by U.S.-based Mohegan Tribal Gaming Authority in partnership with South Korean chemicals manufacturer KCC Corp and Incheon International Airport Corp is scheduled to begin operations by 2020. The second project includes U.S.-based casino group Caesars Entertainment Corp and mainland China real estate developer Guangzhou R&F Properties Co Ltd. According to information provided by Caesars Entertainment management to GGRAsia in January, construction was scheduled to start this month.
South Korea’s Jeju Island has recently also attracted a lot of new gaming-related investment. The semi-autonomous province is already home to a number of casinos, all for foreigners only.
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”Continued negative coverage of the Abe administration, coupled with political losses for the Liberal Democratic Party ... may reduce support for the gaming agenda, which already has only limited public support”
Analyst at brokerage Sanford C. Bernstein