“First IR in Northeast Asia”
Philip Jeon, chairman and CEO of Paradise Co. Ltd., says the South Korean company’s new Paradise City casino resort in Incheon will enliven the country’s greater tourism industry and prove a game-changer for the company itself.
Set to open this month, Paradise City is being developed by Paradise Sega Sammy Co. Ltd., a joint venture of Paradise Co. and Tokyo-based pachinko operator Sega Sammy Holdings Inc.
“This will be the first integrated resort in Northeast Asia and will change the paradigm of the local tourism industry,” Jeon told the Korea Joong Ang Daily newspaper. He added that the casino will be “one of the largest” in South Korea with 154 game tables, 281 slot machines, and electronic games with 62 seats.
According to GGRAsia, Seoul-based brokerage Shinhan Investment Corp.says the launch of Paradise City on April 20 will negatively affect the operating profit of the South Korean casino operator in the short term, but boost its revenue and income from 2018 onward.The brokerage has forecast consolidated operating profit of about KRW54.6 billion (US$48.2 million) for 2017, down 16.5 percent year-on-year, followed by a spurt of 53.3 percent to KRW83.7 billion in 2018.
“Operating profit is projected to drop 57 percent year-on-year in the first half of 2017 due to cost hikes,” said Shinhan Investment’s analyst June-won Sung.“However, it is expected to improve six quarters in a row from third quarter 2017 on the inflow of sales from Paradise City.”
“There will be many tourists coming from abroad to the resort,” Jeon said. “We will have to see how it works out for the next three to four months to see how Paradise City will perform later on.”
The property’s location near Seoul means a large potential base of local visitors, he added. South Korean nationals will be able to enter but not legally gamble at Paradise City. And the presence of a nearby international airport is also a plus.
But brokerage Aegis Capital Corp. said in a March note that new tensions between China and South Korea could keep Chinese tourists away from South Korea. According to CNBC.com, the THAAD missile system, designed to defend South Korea and Japan from missile attacks by North Korea, prompted the Beijing government to block tourist travel from China to South Korea.
“Some estimates suggest that Beijing’s travel ban could reduce the number of Chinese visitors to South Korea by up to 70 percent, resulting in billions of dollars in lost tourism-related revenue,” Scott Seaman, of the Eurasia Group, wrote in a March note to clients.
