GGRAsia – Revenue to grow in 2023 for Newport World Resorts: COO

Revenue to grow in 2023 for Newport World Resorts: COO

May 19, 2023 Newsdesk Latest News, Philippines, Top of the deck

Revenue at Philippine casino and leisure complex Newport World Resorts, in the capital Manila, is expected to continue to grow in 2023, after a strong 2022 performance, says property chief operating officer Hakan Dagtas (pictured). According to the executive, revenue increases are expected in both the gaming and non-gaming segments.

“We are quite optimistic for this year as well as the future,” Mr Dagtas told GGRAsia in an interview.

He added that Newport World Resorts was seeing an influx of foreign customers, particularly South Koreans. That was in likelihood helped by the property’s location, next to the Ninoy Aquino International Airport, Manila’s main air hub.

“The Korean market is big at the moment,” he said, adding “there’s a lot of database that we have from Malaysia, Singapore, Indonesia.” The executive also noted the resort was “now attacking Cambodia, Vietnam,” in marketing terms.

“The local market is also growing,” he added.

Mr Dagtas said foreigners accounted for about 40 percent of the mass-market gamblers at Newport World Resorts. The ratio increased to 60 percent in VIP gaming.

The Philippines is “far from being a saturated” gaming market, stressed the industry executive, forecasting that the country could become Asia’s second-largest gaming jurisdiction by 2026, only behind Macau, and surpassing Singapore.

The Philippine casino sector produced gross gaming revenue (GGR) of PHP59.26 billion (US$1.06 billion) in the three months to March 31, up by 80.9 percent from the prior-year period. The tally rose by 5.8 percent sequentially, according to data by the country’s casino regulator, the Philippine Amusement and Gaming Corp (Pagcor).

Discussing the potential impact on the Philippines of casino liberalisation in Japan, Mr Dagtas said it was still “too early to say”.

Bill Hornbuckle, chief executive and president of U.S.-based casino operator MGM Resorts International, said earlier this month his firm should only be able to open its integrated resort in Osaka – Japan’s first and, so far, only approved casino project – in the first half of 2030.

Japanese customers currently represented only “single digits” in terms of share of Newport World Resorts’ clientele base, Mr Dagtas explained. But he thought that the presence of a casino resort in Japan could be a draw for South Koreans.

Newport World Resorts is owned and managed by Travellers International Hotel Group Inc. The firm posted a full-year profit of nearly PHP1.06 billion in 2022, compared to a loss of just under PHP568.9 million in the previous year, according to information disclosed in April by controlling shareholder the local conglomerate Alliance Global Group Inc.

Travellers International’s first-quarter 2023 overall revenues rose 62.9 percent year-on-year, to PHP7.90 billion. First-quarter GGR increased by 36.2 percent during the period, to just above PHP8.89 billion, said a filing by Alliance Global earlier this month.

Chinese biz, junkets and PIGO

“We are definitely par with 2019, but this is without the Chinese business”, stated Mr Dagtas. He added that Chinese visitors were only now starting to return to the Philippines, following the easing of Covid-19-related travel restrictions in China.

The executive said it was still hard to understand the impact in the Philippines of the harsher stance by mainland China authorities against so-called cross-border gambling involving Chinese nationals, as well as the impact on overall market conditions of the decline of junket operations in Macau. Mr Dagtas pointed out that both situations had coincided with the pandemic, when foreign business was being affected by travel restrictions.

“We are looking for long-term business: junkets with a corporate culture”, said Mr Dagtas.

There is a total of six junket rooms at Newport World Resorts. The property also partners with other junket operators on a casual basis. The two biggest rooms at the property have “more than 20 tables” each, according to Mr Dagtas.

Newport World Resorts operates either profit-sharing or commission-based agreements with junkets. The latter are capped at 1.25 percent of rolling chip turnover generated by local high rollers; the percentage goes up to 1.4 percent for rolling by foreign VIPs.

Newport World Resorts also has a Philippines Inland Gaming Operator (PIGO) licence. Mr Dagtas said this “was really a growing market during pandemic”, as Covid-19-related restrictions prevented players in the Philippines from visiting casinos.

The executive pointed out that PIGO business is “a little bit different” from online gaming. That is because PIGO games must be connected to physical gaming machines or tables located inside the casino. “It is not a random number generator based up in the cloud, based on a server,” he explained.

Newport World Resorts currently has PIGO operations that are associated with physical slot machines. “We are also eyeing to expand it towards table games,” Mr Dagtas added.

The casino complex is meanwhile betting strong on poker. Earlier this month, it hosted the Philippines’ first Poker Dream tournament. That brand has already hosted events in Malaysia and Vietnam.

Mr Dagtas told GGRAsia that Newport World Resorts was a significant player in Asia in the poker segment, having had a poker room since 2010, compared to competitor venues that “went into poker business in and out, on and off.”

He added, regarding his staffing: “We have a solid poker team. It is quite experienced and the partnership with the Asian Poker Tour also made us one of the key players in Asia. With the new rules and regulations coming from Singapore and Macau, plus the accommodation costs, I believe that Manila will become the poker capital of Asia.”

Bingo is another gaming segment for Newport World Resorts. “In terms of traditional bingo, we are the biggest operator in the Philippines,” said Mr Dagtas. “We welcome 300 to 400 people every day. On weekends, it’s obviously much higher: it can go up to 600 people.”

Renaming and new projects

From the time of its launch in 2009, Newport World Resorts had been known as Resorts World Manila, with the now-defunct cruise ship operator Genting Hong Kong Ltd having been a founding partner. The site was renamed in July last year as Newport World Resorts.

‘Resorts World’ is a branding that has been commonly used by casino venues across the world that are run by the Genting marque.

Mr Dagtas confirmed to GGRAsia that Alliance Global was in the process of acquiring Genting Hong Kong’s stake in Travellers International. He added that the deal was awaiting regulatory approvals, and was expected to be concluded by the end of the current quarter.

Newport World Resorts currently has five international hotel brands: Marriott Manila Hotel, Sheraton Manila Hotel, Hilton Manila, Hotel Okura Manila, and Holiday Inn Express Manila. Its casino facilities are divided between two wings and a slot parlour.

During the Covid-19 pandemic, and making use of the associated slowdown in clientele, some of the mall areas and the ground floor of the gaming area in the Garden Wing were revamped.

A ‘grand club’ concept is now being developed on the first floor of the gaming area in the Grand Wing. “It will be accessible only to certain [loyalty] card tiers,” explained Mr Dagtas. “The exciting part is the non-gaming elements: there will be a very nice bar and restaurant.”

In tandem, Newport World Resorts is launching soon a whisky and cigar bar.

Looking ahead, a new building is under construction at the resort, but management is still deciding on its final layout. It might include office and residential space. Construction is expected to take two more years.

Management at Newport World Resorts is also working to link the different buildings that make up the resort, via air-conditioned pedestrian bridges. Two bridges have been completed. The project is to be finalised by 2025, in association with the new building.

“When we finish that, anybody who is in our five-star hotels or in the casinos will be able to walk to the airport, all in indoors,” stated Mr Dagtas.

The overall Newport World Resorts site has one plot of land yet to be developed.

“We have no plan to expand the gaming space,” Mr Mr Dagtas explained. “That area will be non-gaming, but hopefully creating additional headcount for the entire property. In terms of entertainment, theatres, hotels, food… we are complete. We have different five-star hotels that have different cuisines. The last piece of land, we want to do something unique. But there is no decision yet.”