Korea VIP gains starting from low base, UBS says

The steep rise in VIP visitors to South Korea, despite falling trends elsewhere in the region, doesn’t necessarily mean the country is benefiting from the slowdown in Macau, as the numbers are starting from a low base, UBS said in a report.
Grand Korea Leisure reported a 41 percent gain in Chinese VIP volumes in Q3, in contrast to other markets reporting sharp falls, especially in Macau, which was down 19 percent for the three months.
The note says the Korea VIP gamer market was different from others in Asia as it’s more tied to tourism and business travel, so there is little overlap with Macau.
The report noted the VIP player coming to Korea, with spending of US$30-50,000 was more in line with a premium mass player in Macau in spending terms. The report said the high growth rate was linked to the relatively small base of VIP visitor gamers.
"We believe other gaming markets outside of Macau are simply not benefiting from the Macau slowdown for perhaps the same reasons that is driving softness in Macau VIP - a government curb on extravagant spend coupled with a slowing macro-environment," the report said.
The report added junkets were looking to smaller markets like the Philippines and Vietnam.
UBS also expects an increase in regional supply of casinos will add to competition for the VIP market going forward.