Group tours not enough to compensate
Chilly relations between the governments of Seoul and Beijing continue to put stress on South Korea’s foreigners-only casinos, which have relied on Chinese high rollers for much of their VIP revenues.
The split occurred in 2016, after the Terminal High Altitude Area Defense system was installed. THAAD was ostensibly implemented as a safeguard against North Korean aggression, but Beijing says the system’s powerful radar could be used to spy on it.
Last March, China banned the sale of package tours to South Korea. According to the Korea Tourism Organization, Chinese tourists to South Korea amounted 4.17 million in 2017, down 48.3 percent from the previous year. The decline is estimated to have slashed approximately 5 trillion won (US$4.7 billion) from South Korea’s gross domestic product last year.
Last fall, China reinstated group tours to South Korea, but still limits incentive and cruise tours to the country.
In the aftermath, the Paradise Group swung to an operating loss of 30.1 billion won (US$27.9 million) and also saw a net loss of 32.4 billion won (US$30.1 million). The decline was attributed to the drop in Chinese visitors, who accounted for 35 percent of VIP clients last year compared to 45 percent in 2016.
Grand Korea Leisure Co., South Korea’s state-run casino operator, saw revenues drop 8.6 percent year-on-year to 513 billion won (US$477 million) last year, reported the Yonhap News Agency. The company’s operating income dropped 28.5 percent to 182 billion won (US$162.9 million), with net profit down 29.6 percent to 80.5 billion won (US$74.5 million).
A total of 1.2 million gamblers visited GKL last year, with Chinese players accounting for 44.4 percent of the total, down from 49.8 percent from the prior year.
An anonymous industry observer told Yonhap this year may not be much better. “Foreigners-only casinos fared far worse last year due to a decrease in the number of Chinese tourists. They are expected to have tough times this year unless China completely lifts its ban,” he said.
Of 18 casinos in South Korea, all are foreigners-only except for one: Kangwon Land, located in the remote highlands of Gangwon Province.
