Tourism up, especially by South Koreans
Gross gaming revenue in the Philippine casino industry is likely to increase 20 percent in 2015 to $3 billion, Philippine Amusement & Gaming Corp Chairman Cristino Naguiat recently told Bloomberg News.
Naguiat’s forecast caused a surge in Philippine casino shares. Bloomberry Resorts, which runs the Solaire casino, gained 8 percent in the immediate aftermath. Melco Crown Philippines, operator of City of Dreams Manila, rose 8.8 percent. And Travellers International Hotel Group, which operates Resorts World Manila, also posted a gain.
Some industry analysts say the casino industry in the Philippines could have a hard time attracting Chinese gamblers, even as they defect in droves from Macau. Though tourism to the Philippines has increased 8.2 percent so far this year, to 2.23 million, most of the visitors hail from South Korea—comprising 24.5 percent of the total. China is the fourth largest source of tourists, following the U.S. and Japan, with a 7.1 percent share.
ThePhilippine Star reported that some in the industry fear the gaming slump in Macau will also hit the Philippine gaming industry. In a report titled, “Philippine Gaming Sector: Macau Contagion,” the First Metro Investment Corp. said its study “indicated upbeat numbers last May, month-on-month. But it is still hard to bet on the sector on the basis of the recent revenue statistics.”
Macau’s gross gaming revenues dropped 36.2 percent in June year-on-year to $2.18 billion, the 13th straight month of decline and the lowest since November 2010, according to Macau’s Gaming Inspection and Coordination Bureau.
The decline is a result of several factors: a sluggish Chinese economy, President Xi Jinping’s yearlong war on graft and corruption, stricter visa rules, and a smoking ban planned for Macau casinos. A relaxation of the visa restrictions will help; starting this month, the government is allowing visits of up to seven days, from five days, and travelers may return within 30 days rather than 60 days.
However, FMIC reported, “Macau’s gaming slump has contaminated the local industry’s earnings outlook, with share prices of Melco Crown Philippines, Bloomberry and Premium Leisure Corp. all sharply lower” in late June.
Naguiat says the Philippine gaming industry’s more diverse client pool has served to protect it from the impact of the Macau decline. He added that total revenues from the sector rose to $2.5 billion last year, 19 percent higher than the $2.1 billion generated in the previous year. “The figures will speak for themselves,” he said.
