Thursday, August 18, 2022

Jeju projects forge ahead despite tourism slump

Hong Kong-listed Landing International Development opened its Shinhwa World theme park at the end of September, as IR projects for the honeymoon island forge ahead despite the uncertainty caused by a diplomatic spat with China and tensions with the North.

Tourism numbers to the island have slumped following Beijing’s decision in March to ban all tour group travel to South Korea following Seoul’s decision to deploy a U.S. anti-missile system. More recently the accelerated pace of nuclear tests and bellicose rhetoric from the north has raised tension and had a further impact.

Tourist arrivals from China have fallen more than 48 percent in the eight months through August, according to figures from the Korea Tourism Organization. In the month of August, the most recent available, China arrivals were down more than 60 percent.

The number of Chinese tourists who visited Jeju from June 30 to July 6 was tallied at 9,386, about one-eighth of the 77,824 recorded in the same period last year.

Jeju itself is a popular tourism destination for locals, although they are not permitted to gamble in the foreigner-only casinos, which have been heavily reliant on the mainland tourists, which account for about 85 percent of the total.

Still, China-backed projects are continuing apace. The Shinhwa Theme Park, which opened on Sept. 30, was developed in collaboration with TUBAn, one of Korea’s premier animation companies, based on its popular 3D animated characters such as Larva, Wingcle Bear, Buck, and Oscar.

“With the opening of more facilities in Jeju Shinhwa World in the coming months, Jeju Shinhwa World is on track to become a world-class integrated destination resort that Jeju residents will be proud of,” Landing Chairman and Executive Director  Yang Zhihui said at the opening.

The company also recently announced an accord with Lionsgate Entertainment to develop a movie-themed park. The Lionsgate Movie World will be the studio’s first branded outdoor attraction.

The theme park will span 122,000 sqm, and will center around seven movie zones with multiple Lionsgate’s film properties, including Hunger Games, The Twilight Saga and Now You See Me.

Visitors will be able to experience movie scenes through state-of-the-art rides, attractions and 4D Intellectual Property reproduced streets and towns. Each zone will also feature themed restaurants, cafes, souvenir shops and entertainment performances.

The theme park is expected to commence construction in 2018 and is scheduled to open in 2019.

The Jeju Shinhwa resort opened its initial phase in April with serviced resorts condominiums. The second phase, involving MICE facilities and a bowling club will open in November, while the official opening, including a Marriott hotel and the casino will be in December.

Landing is also developing a Four Seasons Resort, which is scheduled to be opened in 2019.

Chief Operating Officer Jay Lee Poh-yee recently told the South China Morning Post that the China tourism slump had affected the $2.2 billion resort and said the company plans to cast its marketing net wider to draw in visitors from Hong Kong, Japan, Taiwan and Southeast Asia.

He said half of the visitors are likely to be domestic travellers.

Landing was originally developing the project with Genting Singapore, which pulled out last year to focus its efforts on Japan. When first conceived, China visitation to the island was on a sharp upswing due to the relaxation of visa requirements for mailand travellers, sparking a flurry of foreign investor interest.

However, the market has proved challenging. Bloomberry Resorts, which operates the Solaire Resort & Casino in Manila, bought a property on the island in 2015, only to attempt to sell it about 15 months later. The sale, to junket promoter Iao Kun Group, now known as LiNiu, fell through in December 2016. The Jeju Sun remains a subsidiary of the group and managed an almost 21 percent gain in gaming revenue for Q2, despite the plunge in tourism arrivals.

The Gongzi Jeju Casino within the Ramada Hotel complex held an official opening in July, while another major project from Lotte Tour Development Co is also moving forward. It has selected Grand Hyatt as the hotel brand for its Jeju Dream Tower integrated resort in a hotel agreement signed in August. The Hyatt will operate 1,600 rooms, 11 restaurants and bars, and all other hotel amenities. It will be the world’s second-largest Hyatt hotel in terms of room capacity.

The company said that it chose Grand Hyatt due to its resonance with the Chinese market which, it says, is a major target market for Jeju Dream Tower.

The project is being co-developed by the Greenland Group, China’s largest property developer, with the China State Construction Engineering Corporation (CSCEC) as the main contractor.

The company expects the project to create 3,000 jobs including hoteliers and casino dealers, and contribute tens of billions of won to the Jeju Tourism Promotion Fund every year.

The company recently raised just over $34 million through a third-party placement of convertible bonds to help finance the development.

The integrated resort is 169 meters tall with 38 stories, covering a total floor area of 303,737 sqm. Each room in Grand Hyatt Jeju will be over 65 sqm.

The company is counting on the island’s multiple natural attractions and unique local culture to draw in tourists, though it remains to be seen whether they will be filling the island’s casinos.


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