GGR down by more than half
Gaming regulators in the Commonwealth of the Northern Mariana Islands have questioned plans by Imperial Pacific International to add 2,000 new hotel rooms to its integrated resort in Saipan.
According to Inside Asian Gaming, Commonwealth Casino Commission Executive Director Edward Deleon Guerrero has asked the House Committee on Gaming to take a second look at the proposal. Guerrero said the CNMI would need 2 million tourist arrivals per year to fill 2,000 rooms. There were fewer than 660,000 arrivals in 2017. In short, the jurisdiction just doesn’t seem to need the inventory.
“I don’t think the CNMI could accommodate 2 million visitors a year,” Marianas Variety quotes Guerrero as saying. “We don’t really need that many tourists because I am not sure our airport can accommodate such numbers. I am not sure that we have the capacity and infrastructure to accommodate that number without sacrificing the needs of our own residents.”
He said IPI should continue to focus on its VIP business and ditch a hotel plan. “It appears that revenue-wise, the VIP room is the direction in which to go—we don’t need the 2,000 rooms or 2 million visitors. We just need to focus on visitors and tourists of that type,” he said.
He also posited that a separate operators might be better equipped to run the hotel portion of the resort in Garapan.
“It’s easier to find an operator to run a casino and an operator to run a hotel than finding an operator who can run both. These are difficult issues that need to be considered.”
Any major development plan by IPI at this point will likely undergo greater scrutiny or even opposition. The casino developer has not endeared itself to officials with repeated missed deadlines to complete the resort, violations of labor laws, failure to make payroll on time, and a precipitous drop in profitability. IPI wrote off nearly $750 million in uncollectable VIP debts in the first half of 2018, debts reportedly incurred by just 10 VIP clients). On August 31, IPI released its financial report for the six months ending June 30, during which the company’s revenue fell 51 percent year-on-year to HK$2.2 billion (US$281.6 million). Earnings fell 72.2 percent to HK$450.5 million and profits toppled 91.3 percent to HK$79 million.
The CCC recently granted IPI a two-and-a-half year extension to the completion date for IPI’s Imperial Pacific Resort until February 2021.
