Jul 06, 2018 Newsdesk Interviews, Latest News, Philippines  
The operator of the Widus Hotel and Casino at Clark Freeport Zone in the Philippines would like to list shares on the Philippine Stock Exchange, but probably not until after phase two of its current expansion programme, including a 380-room hotel tower, is completed in 2020.
By 2020 the operator will have made an aggegrate capital investment of US$500 million in the property since 2008, said Han Daesik (pictured), president and chief executive of Widus International Leisure Inc, in an interview with GGRAsia.
“I have been studying listing my company on the stock market for over a year,” Mr Han stated.
But he added he believed it was worth postponing an initial public offering (IPO) for now, because trading conditions would be “much better in a couple of years because of the big infrastructure projects, like the monorail project from Manila to Clark, New Clark City and the new airport”. Clark is about 230 kilometres (143 miles) northwest of Manila.
The second scheme Mr Han mentioned is a piece of urban redevelopment near to his resort, and the third project is the nearby Clark International Airport Terminal 2. Ground breaking on that scheme occurred in December, and according to local media reports the facility is due to be completed by 2019.
Mr Han stated, regarding the pending supporting infrastructure for tourism: “That’s why in order to maximise the valuation of the company in the stock market, I decided to postpone a little bit.”
Subsequent to the completion of Widus’ fourth hotel tower in 2020, the operator is interested in spending as much as a further US$500 million on additional expansion, including convention facilities.
Widus has not so far attracted the international headlines of its better-known neighbours in Metro Manila – such as Solaire Resort and Casino and City of Dreams Manila. But the Clark property’s CEO says it has carved out a niche for itself, serving mainly so-called premium mass customers – ones betting in higher minimums than ‘grind’ customers, but in cash rather than the credit used by VIPs in rolling chip programmes. Its players mainly come from either South Korea, China or the Philippines.
“When Solaire opened in Entertainment City in 2013 I was a bit concerned about my market, because certain types of casinos were affected… there in Manila,” stated Mr Han.
“That year my GGR increased by 15 percent [year-on-year] and the following year by 20 percent. And every year [since then] we’re enjoying more than a 15-percent increase in terms of GGR.”
Diverse customer base
Mr Han, who is himself of Korean extraction, said that around 40 percent of his customers are South Koreans, “providing 60 percent of the revenue” at the resort. A further 10 percent are Chinese visitors, with around half of the customers being middle-class Filipinos.
The executive added that three airlines run scheduled services between the South Korean capital Seoul and Clark International Airport, with a flying time of up to four hours. According to industry analysts, it can take about that long for South Korean nationals to travel by road from Seoul to Kangwon Land, the only South Korean casino resort permitted currently to serve local players.
“The Clark market is quite different from the Manila market. More serious gamblers will go to Manila. The Clark market is more leisure players,” Mr Han told us.
“The reason they are coming here is because of golf, and because of different entertainment,” he added, noting that anyone visiting a Manila casino that then wanted to play golf nearby might face several hours stuck in the capital’s notorious traffic jams.
“Here in Clark there are several golf courses: it’s very convenient. From the airport to the casino, it takes maybe 10 minutes; from the hotel to a golf course maybe 10 to 15 minutes; and for other entertainment outside, such a bars, it will take only 10 to 15 minutes,” explained the executive.
Although Widus does not currently have its own golf course, Mr Han said his firm is in talks with a public agency – the Bases Conversion Development Authority, which is tasked with redeveloping former U.S. military bases in the Philippines – about the possibility of acquiring land for a 36-hole course.
Premium mass clients
“I would characterise most of the clientele as ‘premium mass market’,” said the Widus International CEO.
He added: “They usually stay three or four nights, and during their stay they spend between US$1,000 and US$10,000 in cash. They are not with junket agents. I don’t need to give away a lot in commission. They get [reward] points and things like comped [complimentary] rooms and food.”
Mr Han further noted: “That is why I am able to move this project further and further: because the numbers are pretty healthy and I don’t need to give a lot of commission.”
The executive said the resort produces casino GGR equivalent to between US$7 million and US$8 million per month, which he added was about 50 percent of all the GGR produced monthly by the five casino resorts – including Widus – based in and around Clark.
He added that “something like 20 to 25 percent” of his resort’s GGR came from rolling chip programme players.
“I have an in-house programme, and I have some Korean [junket] agents and some Chinese agents, bringing in Koreans and Chinese players,” he explained.
Widus does “not yet” offer proxy gambling or live streaming of games – products that cater to casino customers not physically present in a venue – but the management is interested to do so.
“There is proponent I am negotiating with right now, asking for that facility,” Mr Han stated. “As long as my licence… covers that kind of facility, I don’t see any problem to have that kind of facility inside my property.”
The resort currently has 61 live-dealer gaming tables, 20 electronic table games and 342 slot machines, and two hotel towers offering a total of 240 rooms. On September 1, the property is due to open a third tower – under the Marriott brand – with a further 260 rooms. That will take the capital investment in Widus up to US$200 million, said Mr Han.
The structural contract for a US$300-million fourth hotel tower with 380 rooms – under the resort’s own branding – is due to be awarded soon, with that piece of infrastructure to be completed “in the third quarter” 2020, taking the capital investment up to US$500 million.
Extra facilities
When Tower 4 is completed, Mr Han aims for the property’s gaming capacity to rise to 170 tables and 1,000 slots. He said that will be nonetheless “way below” the total gaming capacity permissible for the upgraded site under the Philippine gaming regulator’s room key formula. The latter links investors’ provision of sleeping accommodation serving the tourism industry with the right to gaming inventory.
“The reason I don’t really want to maximise [immediately] this gaming capacity is because putting more tables and slot machines without having other attractions, doesn’t make sense,” he told GGRAsia.
The company has ambitions to expand the resort even further in terms of non-gaming amenities – including possibly conference facilities with an arena capable of housing K-pop acts – as well as K-food outlets offering Korean food, and a K-beauty centre offering a collection of South Korean cosmetics brands ranging from mid-price to high-end products. To do so the management is seeking access to more land adjacent to the property.
“I signed a term sheet with Clark Development Corp many months ago… that property is located right next to my property,” stated Mr Han.
“What I plan to do is to maybe build two [further] hotel towers, convention space, and an extension of the casino, and some commercial areas,” he added.
That could involve a further capital commitment of up to US$500 million, which would take the total capital investment for Widus up to US$1 billion.
Mr Han said: “As a Korean, I know Korean culture very well. And with this Korean wave – K-pop, K-food, K-beauty, with all those cosmetic products… They are very very popular in the Philippines and in China. So I am talking to a number of companies in Korea to bring that concept in.”
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